Q.When fixed capital method is adopted by a partnership firm, which of the following items will appear in capital account ?

Under fixed capital method, only permanent items (additional capital / capital withdrawn) appear in the Capital A/c; routine items go to the Current A/c.

In the TN HSC Class-12 Accountancy syllabus (Partnership Fundamentals), partners' capital can be maintained by two methods:

• Fixed capital method — two accounts per partner: a Capital A/c that stays fixed and records only permanent changes (opening capital, additional capital introduced, and capital permanently withdrawn), and a separate Current A/c that records all routine items — interest on capital, interest on drawings, salary/commission, share of profit or loss, and drawings. …

Under the fixed capital method, salary, commission and interest on capital are credited to the Current Account — option (c).

When partners keep fixed capital accounts, the capital account shows only the original capital (and permanent additions/withdrawals of capital). Every other transaction — interest on capital, salary, commission, share of profit, drawings and interest on drawings — is routed through a separate Current Account.

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