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

Assessment: WAEC SSCE - Financial Accounting - 2021 (Objective) Subject: Financial Accounting

Question 1 Report

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

Answer Details
In a partnership, the partners' share of profit is credited to their capital account. The capital account is a record of each partner's investment in the partnership and any changes to that investment over time. When the partnership earns a profit, the profit is divided among the partners according to their agreed-upon profit sharing ratio, and the partners' share of profit is credited to their individual capital accounts. This increases their capital investment in the partnership, and helps to ensure that the partners are fairly compensated for their contributions to the success of the business.
Read lesson note on Partnership Accounts (WAEC)
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