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If two partners capital accounts are fixed but one partner has a large debit current account balance what caution should be taken while comparing capital ratio?

Answer and explanation

Correct answer: Capital and current accounts should be understood separately

In fixed method capital ratio is seen from capital accounts and current account shows regular adjustments. Mixing them may give wrong answer.

Related tags

Fixed CapitalCurrent AccountCapital RatioCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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