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State whether the following statement are True or False.Capital account always shows credit balance.OptionsTrueFalse |
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Answer» False. Explanation: It is not necessary that a partner’s capital account will always show a positive balance (i.e. credit balance). The capital account of a partner might show a debit balance when a partner withdraws more than his or her share of profits from the firm. Hence, the given statement is incorrect. |
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