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what arethe types ofcapital

 

Asked by palaksundrani121 9th January 2019, 2:19 PM
Answered by Expert
Answer:
There are 2 types of capitals namely, fixed and fluctuating capital.
Fixed Capital: This is the type of capital which is maintained along with Current Accounts. All the debits and credits with respect to the transactions related to Partners like drawings, interest, etc., are recorded in the Current Accounts and hence, the amount in the Partner's Capital Accounts is not affected. On account of such Current Accounts being maintained amount in Capital Accounts remains the same and therefore, it is known as Fixed Capital.
Fluctuating Capital: In this type of Capital Accounts, all the debits and credits with respect to the transactions related to Partners like drawings, interest, etc., are recorded in the Capital Accounts only and no additional Current Accounts are maintained. Therefore, the amount of capital increases or decreases based on the additions and deductions made to Partner's Capital Accounts. Hence, it is known as fluctuatin capital.
Answered by Expert 10th January 2019, 1:00 PM
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