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WAEC Financial Accounting 2021 Question 4

Question 4

Partnership Accounts

Where partners maintain a fluctuating capital account, partners' share of profit is credited to

  1. A.capital account.
  2. B.profit and loss appropriation account.
  3. C.current account.
  4. D.profit and loss account.
Show the answer and explanation

Answer: A (capital account.)

Explanation

With fluctuating capitals there are no current accounts, so profit shares go straight to the capital accounts.