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As capital account shows Rs 4000 debit balance while deed says minimum capital cannot be below zero. What is the correct accounting indication?

Answer and explanation

Correct answer: Rs 4000 should be recovered or adjusted from A

Debit capital balance shows amount against the partner. If capital cannot be negative recovery or adjustment is needed.

Related tags

Debit BalanceRecoveryCapital AccountCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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