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Question
Select the most appropriate alternative from those given below and rewrite the statement.
A debit balance of partner’s current account will appear on the ___________ side of the Balance Sheet.
Options
asset
liability
debit
Credit
Solution
A debit balance of partner’s current account will appear on the asset side of the Balance Sheet.
Explanation: A debit balance in the Partners’ Current Account represents that the partner has withdrawn more than his or her actual share of profits from the firm. Thus, this debit balance is the firm’s asset and the firm has the right to recover this from the partner.
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