If a partner paid Rs 2500 postage expense for firm from personal cash what will happen in his account?

Correct answer: It will be credited

Direct answer: Option A, it will be credited. Postage was a business expense of the firm, but the partner paid it personally. Thus the firm has benefited and owes the partner Rs 2,500. Step by step: recognise the postage as a firm expense; recognise that no firm cash was used; recognise that the partner supplied personal cash; therefore the partner’s claim against the firm increases by Rs 2,500. The partner’s capital account is credited under the fluctuating method, or the current account is credited under the fixed-capital method. Option A is correct. Option B, debit, would mean the partner owes the firm or that his claim has fallen, which is the opposite. Option C, drawings, means money taken from the firm for personal use; this payment was for firm business. Option D, loss, describes the firm’s expense, but it is not the entry in the partner’s account and does not explain the reimbursement claim. Memory cue: personal payment for firm expense equals partner credit.