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Under fixed capital method A current account is debit twelve thousand rupees and capital account is credit forty thousand rupees. If A withdraws eight thousand rupees from permanent capital which balance changes?

Answer and explanation

Correct answer: Capital account will reduce to credit thirty two thousand rupees

Permanent capital withdrawal affects capital account. So forty thousand minus eight thousand leaves credit thirty two thousand.

Related tags

Fixed CapitalPermanent WithdrawalCapital AccountCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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