Partner's drawings
Additional capital introduced by the partner in the firm
Loan taken by a partner from the firm
Loan advancedby a partner to the firm
Answer is Right!
Answer is Wrong!
The correct answer is: B. Additional capital introduced by the partner in the firm
A partner’s capital account is a record of the partner’s investment in the firm. It includes the partner’s initial investment, any additional capital introduced into the firm, and the partner’s share of the firm’s profits or losses.
When the capital accounts are fixed, the partner’s capital account will only be increased by additional capital introduced into the firm. This is because the partner’s capital account is a record of the partner’s investment in the firm, and any additional capital introduced into the firm increases the partner’s investment.
The other options are incorrect because they do not increase the partner’s investment in the firm.
- Option A: Partner’s drawings are withdrawals of capital from the firm. They decrease the partner’s investment in the firm.
- Option C: A loan taken by a partner from the firm is a debt owed by the partner to the firm. It does not increase the partner’s investment in the firm.
- Option D: A loan advanced by a partner to the firm is an asset of the firm. It does not increase the partner’s investment in the firm.