Q12. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R) : (1) Assertion (A): The Fixed Capital Account balance of a partner may change due to Additional Capital introduced or Capital Withdrawn or both, during the year Reason (R): Under Fixed Capital method, the partner's capital accounts balance always remain same. In the context of the above two statements, which of the following is correct? a) Both (A) and (R) are correct b) (A) is correct but (R) is wrong c) (A) is wrong but (R) is correct d) Both (A) and (R) are wrong​

Answers 1

Answer: (A) Assertion is correct but Reason is false

Explanation:

The capital may or may not remain the same under the fixed system.  A separate Capital and Current a/c are maintained. If capital is introduced or withdrawn, it is treated in the Capital A/c. So no, capital will not always remain the same, as it may or may not change.

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