Fixed Capital Method:

Under this method, two accounts are maintained for each partner viz., (i) Capital account and (ii) Current account. The capital account
will continue to show the same balance from year to year unless some amount of capital is introduced or withdrawn. In the current account, the transactions relating to drawings, interest on capital, interest on drawings, salary, share of profit or loss etc., are recorded. Hence, the balance in the current accounts change every year. Format : (Fixed Capital Method)

Capital Accounts

Dr.                                                                                                                                                                                                                                                  Cr.

Particulars	X Rs.	Y Rs.	Z Rs.	Particulars	X Rs.	Y Rs.	Z Rs.
To Balance c/d				By Balance b/d     By Balance b/d

 

Particulars	X Rs.	Y Rs	Z Rs.	Particulars	X Rs.	Y Rs.	Z Rs.
To Drawings To Interest on   drawings     To Balance c/d*				By Balance b/d* By Interest on capital By Commission By Salary By Share of Profit By Balance b/d*

* The balance may be on the opposite side also.