Question

Which of the following items cannot be recorded in the capital account of partners if the capital accounts of partners are fixed?

• A. Drawings
• B. Withdrawal of capital
• C. Introduction of additional capital
• D. Opening balance of capital

Hint:

In a partnership with fixed capital accounts, adjustments like drawings, interest, and share of profits/losses are always recorded in the current account, not in the fixed capital account.

Answer 1

The Correct Option is A

When a partnership firm maintains fixed capital accounts for its partners, the fixed capital account exclusively records permanent capital transactions, including opening balances, additional contributions, and capital withdrawals. Non-capital adjustments, such as drawings, interest on capital, and profit/loss allocations, are instead debited or credited to the partner's current account. Consequently, drawings are not recorded in the fixed capital account, indicating that \( (A) \) is the correct choice.