Why are names like A B or C written with capital accounts?

Correct answer: Because each partner has a separate account

Direct answer: Option A, because each partner has a separate capital account. In a partnership, the business receives capital from more than one person. The amount contributed, later profit, drawings and other adjustments must be known separately for each person. Therefore accounts are identified by names such as A’s Capital Account, B’s Capital Account and C’s Capital Account. Option A is correct because separate names prevent one partner’s balance from being confused with another’s. Option B is wrong: several partners require separate records, not only one account. Option C is wrong: a bank does not decide the names of partners’ capital accounts; this is an accounting requirement. Option D is wrong: customers are unrelated to the reason partners’ capital accounts are separately named. The same principle applies to current accounts when the fixed-capital method is used. Memory cue: one partner, one identifiable capital balance.