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Question
Distinguish between ‘Fixed Capital Account’ and ‘Fluctuating Capital Account’ on the basis of credit balance
Solution
| Basis | Fixed Capital Account | Fluctuating Capital Account |
| Credit Balance | Fixed Capital Account always shows a credit balance as all the adjustments related to interest on capital, interest on drawings, salary, etc. are made through Partners’ Current Account |
Fluctuating capital account can have both debit and credit balances as all the adjustments of interest on capital, interest on drawings, salary, etc. are made through the same account. |
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Answer in one sentence only:
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