WHEN A LIABILITY IS TO BE DISCHARGED BY A PARTNER WHY IS HIS CAPITAL ACCOUNT CREDITED?

Dear Student, when any partner discharge the liability of the firm then Realisation A/c is debited because liability of the firm is decreasing ( as per the rule of Nominal Account i.e. 'Debit all the expenses and losses') and Partner's Capital Account is credited as per the rule of Personal Account i.e. 'Credit the Giver'. 

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  • 3

this is because when we show that the partner is taking xyz liability or he/she is paying for it that will be also shown into their capital a/c ( this is due to every entry has a dual effect must studied in class 11 )

  • 9

It can also be siad that the credit side is favourable side of the partners including all gains/ receipts whreas debit side is the side for all the payments and losses that the partners incur.

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