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Under fluctuating capital method partners capital becomes zero and further drawings remain. How should excess drawings be understood?

Answer and explanation

Correct answer: Debit balance recoverable from partner

When drawings exceed capital the partners account may become debit. It shows amount recoverable by the firm.

Related tags

Excess DrawingsDebit CapitalRecoverableCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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