If B has a guarantee and the deficiency is to be made good equally by A and C how will deficiency be shown in B account?

Correct answer: Additional credit in B account

The direct answer is Option A: additional credit in B’s account. A guarantee means B is assured a minimum share or amount. First calculate B’s actual entitlement; if the actual amount is lower, the deficiency is the shortfall that must be made good by A and C equally. Because the deficiency is receivable by B, B’s capital or current account receives an additional credit for that amount. Option A is correct. Option B is wrong because a debit would reduce B’s entitlement. Option C is wrong because the guarantee creates an adjustment. Option D is wrong because the deficiency is not B’s drawing; it is compensation for the guaranteed amount. A and C bear the deficiency equally in their profit accounts.