Question

Name the methods by which the capital accounts of partners can be maintained?

Options

• fixed capital method

• Fluctuating capital method.

• Both fixed capital method and Fluctuating capital method.

• None of these

Answer 1

Both fixed capital method and Fluctuating capital method.

Explanation:

The capital accounts of partners can be maintained in one of two ways. These are the fixed capital method and fluctuating capital method. The difference between the two is whether or not transactions other than capital additions and withdrawals are reflected in the partners' capital accounts.