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Under fluctuating capital method if share of loss is wrongly credited what will be the total effect of the error?

Answer and explanation

Correct answer: Capital will be overstated by twice the loss amount

Loss should have been debited but was credited. Therefore the difference from correct position is twice the loss amount.

Related tags

Loss ShareErrorCapital OverstatementCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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