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If under fixed capital method balances of capital account and current account are combined and shown as one capital balance what is the risk?

Answer and explanation

Correct answer: Difference between permanent capital and regular adjustments will be lost

In fixed method capital and current accounts give separate information. Combining them hides the real fixed capital position.

Related tags

Fixed CapitalCombined BalancePresentation RiskCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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