give the difference b/w fixed and fluctuating capital accounts.
Basis of distinction | Fixed capital | Fluctuating capital | |
1. | No. Of accounts maintained | Two accounts are maintained: fixed capital account and current account | Only one account (viz. capital account) is maintained for each partner |
2. | Frequency of change | Balance in fixed capital account does not change | The balance changes frequently from period to period |
3. | Adjustment for drawings etc. | All adjustments for drawings interest or drawings, interest on capital, salary, share of profit/loss are made in current account | All adjustments for drawings, interest on capital, salary, share of profits are made in capital account |
4. | Balance | It always shows credit or positive balance in capital account | Fluctuating capital account may sometimes show a debit or negative balance |