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Under fixed capital method salary payable to partner is paid in cash. What is the correct accounting idea?

Answer and explanation

Correct answer: First credit current account and on payment debit current account

When salary becomes due current account is credited and on payment it is reduced. This keeps capital account fixed.

Related tags

Partner SalaryPaymentCurrent AccountCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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