Capital Accounts

Credit items total twenty eight thousand and debit items total nineteen thousand. So closing current account is credit nine thousand rupees.

Credit total is fourteen thousand and debit total is twenty six thousand. Therefore closing balance is debit twelve thousand rupees.

A capital represents three parts so one part is forty thousand. B target capital is eighty thousand and he must bring ten thousand.

Total capital is one lakh fifty five thousand and in two to one ratio A target is about one lakh three thousand three hundred thirty three. So A brings deficiency and B withdraws excess.

In fixed capital such adjustment should be in current accounts. Remove wrong capital effect and pass the same effect through current accounts.

Direct answer: Option A, capital will be overstated by Rs 8,000. In the fluctuating capital method, a partner’s share of loss is debited to the capital account because loss reduces the partner’s claim. Step by step: correct accounting would subtract Rs 8,000 from capital; the error omitted that debit; consequently the recorded capital remains Rs 8,000 higher than it should be. Option A is correct. Option B, understated by Rs 8,000, reverses the effect: omission of a reduction cannot make the balance smaller. Option C, overstated by Rs 16,000, counts the error twice; only one Rs 8,000 loss entry was missed. Option D, no effect, is wrong because the closing balance is directly affected by the omitted debit. Simple check: correct capital = reported capital minus Rs 8,000, so reported capital exceeds correct capital by Rs 8,000. Memory cue: missed debit means the balance is too high by that debit.

Drawings should have been debited but were credited. Difference from correct position is double which is twenty thousand rupees.

The deed fixes capital account balance as the base. Credit balance of current account will not be added to the interest base.

Credit capital is liability and debit current account is recoverable. Net liability is fifty thousand minus twenty thousand which is thirty thousand.

Net capital contribution from machinery is forty thousand minus ten thousand which is thirty thousand. One lakh plus thirty thousand minus fifteen thousand equals one lakh fifteen thousand.

Capital contribution is recorded at the value agreed by partners. If agreed value is given in the question use it.

Cash deposit credits the capital account. After setting off debit five thousand the remaining balance is credit three thousand.

Permanent capital withdrawal affects capital account. So forty thousand minus eight thousand leaves credit thirty two thousand.

Total capital is one lakh forty thousand and equal target is seventy thousand each. A has excess two thousand and B has deficiency two thousand.

Total parts are six and one part is fifty thousand rupees. First partners three parts will be one lakh fifty thousand rupees.

Total capital is three lakh and target capitals are one lakh twenty thousand one lakh twenty thousand and sixty thousand. A has excess twenty thousand while B has deficiency and C has excess ten thousand.

Target capital is one lakh twenty thousand for A and B and sixty thousand for C. B has ninety thousand so he must bring thirty thousand.

When drawings exceed capital the partners account may become debit. It shows amount recoverable by the firm.

To close debit current balance the current account is credited. To reduce partners capital the capital account is debited.

Partners loan and capital should be in separate accounts. Mixing loan with capital misstates the nature of liability.

Interest on capital should have been credited but was debited so difference is twelve thousand. Interest on drawings debit is correct so total error is understatement by twelve thousand.

Credit of interest on capital is correct but interest on drawings should be debited. Crediting it creates double difference of six thousand rupees.

Omitted profit should be added to partners capital. Therefore correct capital is seventy five thousand plus eleven thousand which is eighty six thousand.

Drawings are debited and omission overstates credit balance. Deducting four thousand gives correct credit balance of sixteen thousand.

Credit current account is amount payable to partner. On payment liability decreases so current account is debited.