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Under fixed capital method permanent capital withdrawal of nine thousand rupees was debited to A capital account and also debited to current account. What is the effect of error?

Answer and explanation

Correct answer: Total partner balance will be understated by nine thousand rupees

Permanent withdrawal should go only to capital account. Extra debit in current account understates total partner claim by nine thousand rupees.

Related tags

Fixed CapitalDouble DebitErrorCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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