Any two differences between Partners’ Fixed Capital Account and Fluc

Any two differences between Partners’ Fixed Capital Account and Fluctuating Capital Account.

Answer»

i) Distinction between Fixed & Fluctuating Capital Accounts:

Fixed Capital	Basis	Fluctuating Capital
The balance remains unchanged / fixed.	Change in Balance	The balance changes from period to period.
Adjustments for drawings, interest and profit are recorded in current a/c	Adjustments	Adjustments for drawings, interest and profit are recorded in the capital a/c itself.
It cannot have debit (negative) balance.	Debit Balance	It can have debit balance. Shown on asset side of Balance Sheet
Each partner has two a/c Capital & Current	No. of Accounts	Each partner has only one a/c Capital
Both capital & current a/c with Cr. Bal. are shown on Liabilities & Dr. Bal. on the Asset side balance sheet	Presentation in the Balance Sheet	Only capital a/c is shown, Cr. Bal. on the Liabilities and Dr. Bal. on the Asset side of the Balance Sheet.

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Any two differences between Partners’ Fixed Capital Account and Fluctuating Capital Account.

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