Regarding entry
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 April 2016
In A Partner Ship Firm buy mistakly a Partner capital has gone debit ...so can we adjust this capital through other partners capital account
Like This
partner capital A/c Dr
To Partner Capital
Mistake ....partner taken amount from firm ...so can v adjust
Like This
partner capital A/c Dr
To Partner Capital
Mistake ....partner taken amount from firm ...so can v adjust
19 April 2016
WHAT MISTAKE LEAD TO IT?
20 July 2025
Got it! Here’s how to handle that situation:
Scenario:
Partner A’s capital account is wrongly debited (meaning it shows a negative or less balance).
Partner A has taken some amount from the firm mistakenly (like a withdrawal or loan not properly recorded).
You want to adjust this debit balance by transferring from other partners’ capital accounts.
Is this allowed?
Generally, no. Partner capital accounts reflect each partner’s individual equity/share in the firm. You cannot adjust one partner’s negative balance directly by crediting it from other partners’ capital accounts unless all partners agree and it is properly documented.
Proper way to handle this:
Identify the nature of the debit:
If Partner A took money as a loan or advance, it should be shown as a current account or loan account, not debiting the capital account.
If it’s an error, you need to correct the mistake by reversing the wrong entry.
Correction entries:
Reverse the wrong debit in Partner A’s capital account.
Pass the correct entry to reflect the withdrawal as a drawings or loan.
If adjustment between partners is needed:
Partners can agree to adjust the negative balance by capital contribution from others.
Pass journal entry:
Partner B Capital A/c Dr
Partner C Capital A/c Dr
To Partner A Capital A/c
But this should be with mutual consent and properly recorded in the partnership deed or by a resolution.
Example entry for correction if partner took money as a loan:
If partner took money mistakenly and it was wrongly debited in capital account:
Reverse wrong entry:
Partner Capital A/c Dr
To Cash/Bank A/c
Pass correct entry:
Loan to Partner A/c Dr
To Cash/Bank A/c
Summary:
Don’t directly adjust one partner’s capital debit with others without agreement.
Correct the mistake by reversing wrong entries.
Use loan or current account if partner has taken money.
Only adjust between capitals with consent and proper documentation.
Scenario:
Partner A’s capital account is wrongly debited (meaning it shows a negative or less balance).
Partner A has taken some amount from the firm mistakenly (like a withdrawal or loan not properly recorded).
You want to adjust this debit balance by transferring from other partners’ capital accounts.
Is this allowed?
Generally, no. Partner capital accounts reflect each partner’s individual equity/share in the firm. You cannot adjust one partner’s negative balance directly by crediting it from other partners’ capital accounts unless all partners agree and it is properly documented.
Proper way to handle this:
Identify the nature of the debit:
If Partner A took money as a loan or advance, it should be shown as a current account or loan account, not debiting the capital account.
If it’s an error, you need to correct the mistake by reversing the wrong entry.
Correction entries:
Reverse the wrong debit in Partner A’s capital account.
Pass the correct entry to reflect the withdrawal as a drawings or loan.
If adjustment between partners is needed:
Partners can agree to adjust the negative balance by capital contribution from others.
Pass journal entry:
Partner B Capital A/c Dr
Partner C Capital A/c Dr
To Partner A Capital A/c
But this should be with mutual consent and properly recorded in the partnership deed or by a resolution.
Example entry for correction if partner took money as a loan:
If partner took money mistakenly and it was wrongly debited in capital account:
Reverse wrong entry:
Partner Capital A/c Dr
To Cash/Bank A/c
Pass correct entry:
Loan to Partner A/c Dr
To Cash/Bank A/c
Summary:
Don’t directly adjust one partner’s capital debit with others without agreement.
Correct the mistake by reversing wrong entries.
Use loan or current account if partner has taken money.
Only adjust between capitals with consent and proper documentation.
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