If a partnership firm is converted to a proprietor ship business and the firm is wholly hold by one of the partner then what will the accounting treatment?
Also how to treat the capital of partners after conversation.?
Capital Accounts does have a credit balance in BS and it means it is a liability for business to return back the capital taken from partners. So when one partner leaves business settles his account with Cash or with Kind or both. In this case Capital Account needs to be debited and Cash Account Needs to be Credited and any other Asset which is being settled to their FnFs needs to be credited...
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