Fixed and Fluctuating Capital Accounts - Partnership Accounts, Advanced Corporate Accounting B Com Notes | EduRev

Advanced Corporate Accounting

B Com : Fixed and Fluctuating Capital Accounts - Partnership Accounts, Advanced Corporate Accounting B Com Notes | EduRev

The document Fixed and Fluctuating Capital Accounts - Partnership Accounts, Advanced Corporate Accounting B Com Notes | EduRev is a part of the B Com Course Advanced Corporate Accounting.
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Methods of Maintaining Capital Accounts of Partners: There are two methods of maintaining capital accounts:

a. Fixed Capital Method:  Under this method two accounts are maintained for each partner, 1. Capital Account and 2. Current Account. The capitals of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn. All items like share of profit or loss, interest on capital, drawings, interest on drawings, etc. are recorded in Partner’s Current Account.

b. Fluctuating Capital Method: Under this method, only one account, i.e. capital account is maintained for each partner. All the adjustments relating to  Introduction or withdrawal of capital, share of profit and loss, interest on capital, drawings, interest on drawings, salary or commission to partners, etc are recorded in the capital accounts of the partners. 

                                   

Capital A/cs          Amount in Rs.

Particulars

A

B

Particulars

A

B

To Bank

20000

 

By Balance b/f

120000

80000

To Balance c/f

100000

100000

By Bank A/c

 

20000

 

120000

100000

 

120000

100000

 

                                   

Current A/cs       Amount in Rs.

Particulars

A

B

Particulars

A

B

To Drawings A/c

15000

10000

By Interest on Capital

7500

5000

To Interest on Drawings

2000

1000

By Salary

5000

-

 

 

 

By Commission

-

2000

To Balance c/f

13500

8000

By P & L Approp. A/c

18000

12000

 

30500

19000

 

30500

19000


Fluctuating Capital Method:

                                                   

 Capital A/cs      Amounts in Rs.

Particulars

A

B

Particulars

A

B

To Bank (withdraw cap)

20000

 -

By Balance b/f

120000

80000

To Drawings A/c

15000

10000

By Bank (Further cap)

-

20000

To Interest on Drawing

2000

1000

By Interest on Capital

7500

5000

To Balance c/f

113500

108000

By Salary

5000

-

 

 

 

By Commission

-

2000

 

 

 

By P & L Approp. A/c

18000

12000

  150500 119000   150500

119000

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