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Partnership problem

RishebhKumar (Studying) (128 Points)

05 June 2012

What is EFFECTIVE CAPITAL in partnership accounts and what is the use of it ?

And also how is EFFECTIVE CAPITAL Calculated..?

thanks in Advance...

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2 Replies

intermediate(ipc)course (no) (1460 Points)
Replied 05 June 2012

effective capital means aggregate of paid-up share capital (excluding share application money), share premium account, reserves & Surpluses (excluding revaluation reserve), long-term loan and deposits repayable after one year minus investments, accumulated losses & preliminary exp. not written off.

RishebhKumar (Studying) (128 Points)
Replied 05 June 2012

But what is the use of effective capital in partnership account...I was solving partnership question and in that question there was effective capital and their calculation was not clear to me... so tell me how to calculate effective capital(IN PARTNERSHIP) ...

thank you