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A debit balance in a capital account may indicate which situation?

Answer and explanation

Correct answer: Partner withdrew more than capital

A debit balance may show that the partner has withdrawn more than his share. In exams, treat it as an overdrawn position.

Related tags

Debit BalanceOverdrawn CapitalCapital AccountCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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