Question

Distinguish between Fixed and Fluctuating Capitals Accounts. 

 

Answer 1

Basis	Fixed Capital	Fluctuating Capital
Capital  Balance	Generally, the capital balance of the partner remains unchanged except in case where capital is withdrawn or additional capital is introduced.	Under this method, capital balance of the partners keeps on changing from year to year.
Number of Accounts	In this method, two separate accounts are maintained namely, Partners’ Capital Account and Partners’ Current Account.	In this method, only one account is maintained i.e. Partners’ Capital Account.