The capital contribution by the partners is treated in the?
Question 1 Report
The capital contribution by the partners is treated in the?
Answer Details
The capital contribution made by partners is treated in the capital account. The capital account is a personal account which records all the transactions related to the capital of the business. When a partner contributes capital to the business, it is recorded as a credit entry in the capital account, indicating an increase in the capital of the business. Similarly, when a partner withdraws capital, it is recorded as a debit entry in the capital account, indicating a decrease in the capital of the business. Thus, the capital account reflects the amount of capital invested by each partner in the business.
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