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If under fluctuating capital method share of loss is wrongly credited what will be the effect on closing capital?

Answer and explanation

Correct answer: Overstated by twice the loss amount

Loss should have been debited but was credited. So capital is overstated by twice the amount of loss compared with correct position.

Related tags

Loss ShareErrorOverstatementCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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