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What if the partner's captial account have Dr balance (dr sum is more then cr) what does it mean.. is it mean partner has to pay for firm.. in balance sheet how will it affect ??? Please help me
Answers (9)
CA Suraj Lakhotia Admin
Capital Account
Sir that mean partner has to pay for the firm is it correct sir?
A debit balance in the partner capital account means he / she has withdrawn too much money or goods in anticipation of profits. His drawings are greater than the amount of profits due to him, and he becomes a temporary debtor of the business. Hence, a debit balance in a partnerâ??s current account appears as a current asset on the balance sheet.
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