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What is meant by Fixed capital and fluctuating capital? please clarify on this.
Replies (4)
In case of Fixed capital, the amount in Capital is always kept as fixed and all adjustments regarding interest, profit, etc. are done in Partners' Current A/C. So, there are two accounts.
In case of fluctuating capital, the amount of capital keeps on changing as there is only one account i.e. Partner's Capital A/c. All adjustments are made in this account itself.
| Originally posted by : CA Amit Jaiswal | ||
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In case of Fixed capital, the amount in Capital is always kept as fixed and all adjustments regarding interest, profit, etc. are done in Partners' Current A/C. So, there are two accounts. In case of fluctuating capital, the amount of capital keeps on changing as there is only one account i.e. Partner's Capital A/c. All adjustments are made in this account itself. |
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Agreed.....Only fixed addition or fixed deduction to Capital are adjusted in Capital A/c in case of Fixed Capital...
Thank you my dear friends...
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