It is given in T.S Grewal that while making fixed capital account 2 accounts will be created . In capital account only withdraw and additional capital will come and in current account all interests, profit/loss will come. But in illustration 10 drawing is debited in current account. Why drawing is not debited from capital account when account is fixed..
Hello,
Withdrawal of Capital and drawing are two separate things.
Withdrawal of capital is only shown in Partner's capital account in case of fixed capital method. This means the Capital account of the partner will continue to show same balance every year until and unless some fresh capital has been introduced or something has been withdrawn out of capital. And the drawing reflected in Partner's Current account are the withdrawal of money or goods by the partner for personal use. This is reflected in current account. This is not the reduction in capital of partner.
Also, if you see the format given in T.S Grewal, it shows drawings in Partner's Current A/c and Withdrawal of Capital in Partner's Capital A/c.
Keep posting for further doubts!!
Withdrawal of Capital and drawing are two separate things.
Withdrawal of capital is only shown in Partner's capital account in case of fixed capital method. This means the Capital account of the partner will continue to show same balance every year until and unless some fresh capital has been introduced or something has been withdrawn out of capital. And the drawing reflected in Partner's Current account are the withdrawal of money or goods by the partner for personal use. This is reflected in current account. This is not the reduction in capital of partner.
Also, if you see the format given in T.S Grewal, it shows drawings in Partner's Current A/c and Withdrawal of Capital in Partner's Capital A/c.
Keep posting for further doubts!!