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A capital is one lakh rupees and current account has debit balance of twelve thousand rupees. How should the net effect be understood in balance sheet?

Answer and explanation

Correct answer: Capital liability one lakh and current account recoverable twelve thousand

Capital credit balance is a liability and current account debit balance is recoverable. Understand their different nature in presentation.

Related tags

Balance SheetCurrent AccountCapital PresentationCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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