Where fixed capitals are maintained, partners’ drawings are transferred to the
-
A.
credit of capital account -
B.
debit of capital accounts -
C.
credit of partners’s current accounts -
D.
debit of partners’ currents account
Correct Answer: Option B
Explanation
Asset accounts normally have debit balances, while liabilities and capital normally have credit balances. Income has a normal credit balance since it increases capital . On the other hand, expenses and withdrawals decrease capital, hence they normally have debit balances.
Therefore partners drawings would have a debit balance in the capital account