Question:easy

If the capital of partners is fixed, then the salary provided to the partner is posted in which of the following account?

Show Hint

With fixed capital, salary, interest and drawings go to the Current Account, not the Capital Account.
Updated On: Oct 1, 2026
  • Capital Account
  • Current Account
  • Profit and Loss Account
  • Executor's Account
Show Solution

The Correct Option is B

Solution and Explanation

Step 1: Think about the purpose:
The reason for keeping capital fixed is to show only the money the partner really invested. Everything that keeps changing during the year needs a home somewhere else.

Step 2: Where the entry goes:
That other home is the Current Account. The journal entry in the books of the firm is:
Profit and Loss Appropriation A/c Dr.
To Partner's Current A/c
So salary is credited to the Current Account.

Step 3: Rule out the others:
Capital account: used only if capital is fluctuating.
Profit and Loss A/c: the salary is a charge against profit, not the account where the partner keeps his claim.
Executor's account: only for a deceased partner.

Final Answer:
Current Account. \[ \boxed{\text{Option 2}} \]
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