Under the fluctuating capital method, partner A's capital is Rs 1,00,000. In a goodwill adjustment A's capital account is first debited by Rs 15,000 and later credited by Rs 15,000 as profit share. What is the net effect on A's capital?

Correct answer: No net change

The debit and the credit are equal and opposite entries in A's capital account. Net effect = -₹15,000 (debit) + ₹15,000 (credit) = ₹0, so A's capital remains unchanged. A common mistake is to treat each entry separately instead of netting them; under the fluctuating capital method such adjustments are posted directly to the capital account and cancel out when equal. Exam tip: draw the capital T‑account and total debits and credits to avoid sign errors.