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The partner's capital account is similar to the owner's equity account in a sole proprietorship. It is also similar to shareholder's equity account on a corporation's balance sheet.

It is the different between assets and liabilities in a company. Meaning the sum of partner's investment + revenue - expenses.

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Hal Homenick

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2y ago

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What are the difference between fixed capital and fluctuating capital?

Difference between Fixed and Fluctuating Capital AccountsFixed and fluctuating capital accounts are the terms which are often used in the context of partnership. Partners can maintain the capital accounts in two ways one is fixed capital account and other is fluctuating capital accounts, let's look at the difference between both of them - Fixed Capital Account - Under this system, the capital which is introduced by partners will remain fixed throughout the life of the partnership. Hence under this method two type of accounts are made one is capital account and other is current account. Therefore all entries relating to drawings, interest on capital, profit and loss share of partner are made in a separate account for each partner, it is called current account of partners. However when partner brings additional capital or withdraws capital permanently, then capital account is credited or debited respectively.Fluctuating Capital Account - Under this method capital account of partners will not remain fixed rather they will keep fluctuating from time to time. In this method all the entries related to drawings, interest on capital and share of profit and loss of partner are recorded in capital account, hence in this method there is no need for current account.Fluctuating capital account method is usually preferred by partners; however they can also use fixed capital account according to their business and preference.


What is difference between current account and capital account?

Current account shows current year current year transactions and capital account shows both current transactions relating to businessman and initial capital of businessman.According to FEMA Act 2000, "There is no restrictions on holding or exchanging of foreign currency under Current Account . But Any foreign currency is under capital account , then it must be controlled under the regulations of RBI."In partnership , partners can make current account separately from capital account in which they can show only their salary, interest on capital and interest on drawing etc. and in capital account, they can show only their capital invested in the business of partnership.USA has divided export and import transactions into 2 accounts: One is the current account and other is the capital account. The current account includes in international trade in goods and services and with earnings on investments. The capital account includes of capital transfers and the acquisition and disposal of non-produced, non-financial assets.In general Current account is used for receipt and payment cash and non capital items and capital account is used for sources and utilization of capital.


What does the company Capital Partners do?

Capital Partners is an investment firm established in 1982 that invests and supports small and middle sized companies. Capital Partners has invested in more than sixty companies.


Why is a capital account has credit balance?

The normal balance in a capital account is a credit. Capital is a balance sheet account. Assets = Liabilities + Capital


What is the journal entry to interest on capital?

[Debit] Interest on capital account xxxx [credit] Capital account xxxx

Related Questions

What are the difference between fixed capital and fluctuating capital?

Difference between Fixed and Fluctuating Capital AccountsFixed and fluctuating capital accounts are the terms which are often used in the context of partnership. Partners can maintain the capital accounts in two ways one is fixed capital account and other is fluctuating capital accounts, let's look at the difference between both of them - Fixed Capital Account - Under this system, the capital which is introduced by partners will remain fixed throughout the life of the partnership. Hence under this method two type of accounts are made one is capital account and other is current account. Therefore all entries relating to drawings, interest on capital, profit and loss share of partner are made in a separate account for each partner, it is called current account of partners. However when partner brings additional capital or withdraws capital permanently, then capital account is credited or debited respectively.Fluctuating Capital Account - Under this method capital account of partners will not remain fixed rather they will keep fluctuating from time to time. In this method all the entries related to drawings, interest on capital and share of profit and loss of partner are recorded in capital account, hence in this method there is no need for current account.Fluctuating capital account method is usually preferred by partners; however they can also use fixed capital account according to their business and preference.


In the admission by purchase of interest what are the pertinent entries to be made if the payment to the old partners is equal to the interest purchased?

In the admission by purchase of interest, when the payment to the old partners equals the interest purchased, the relevant entries include debiting the capital accounts of the old partners (in proportion to their sacrifice) and crediting the new partner's capital account. Additionally, the cash or bank account is credited for the amount paid to the old partners. This reflects the transfer of interest in the partnership from the old partners to the new partner without affecting the overall capital structure.


When was Charlesbank Capital Partners created?

Charlesbank Capital Partners was created in 1991.


What is TrueBridge Capital Partners's population?

The population of TrueBridge Capital Partners is 8.


When was TrueBridge Capital Partners created?

TrueBridge Capital Partners was created in 2007.


When was Meritech Capital Partners created?

Meritech Capital Partners was created in 1999.


What is the population of Meritech Capital Partners?

The population of Meritech Capital Partners is 20.


When was Avista Capital Partners created?

Avista Capital Partners was created in 2005.


When was GSO Capital Partners created?

GSO Capital Partners was created in 2005.


When was Flybridge Capital Partners created?

Flybridge Capital Partners was created in 2001.


When was Trimaran Capital Partners created?

Trimaran Capital Partners was created in 1990.


When was Arlington Capital Partners created?

Arlington Capital Partners was created in 1999.