A. current account
B. profit and loss account
C. profit and loss appropriation account
D. capital account
Correct Answer:
Option D – capital account
Explanation
The partnership capital account is an equity account in the accounting records of a partnership. It contains the following types of transactions:
- Initial and subsequent contributions by partners to the partnership, in the form of either cash or the market value of other types of assets
- Profits and losses earned by the business, and allocated to the partners based on the provisions of the partnership agreement
- Distributions to the partners
