CAPITAL ACCOUNTS PART 2. | CLASS 12TH | ACCOUNTS | PARTNERSHIP ACCOUNTING.
IN THIS VIDEO YOU WILL LEARN HOW TO PREPARE THE CAPITAL ACCOUNTS OF THE PARTNERS UNDER THE FIXED CAPITAL METHOD AND FLUCTUATING CAPITAL METHOD UNDER PARTNERSHIP ACCOUNTING. KINDLY WATCH THE VIDEOS IN PROPER SEQUENCE. THIS IS PART 2 OF " CAPITAL ACCOUNTS". KINDLY SHARE THIS VIDEO WITH YOUR FRIENDS ALSO. THANKS AND REGARDS.
IN THIS VIDEO YOU WILL LEARN HOW TO PREPARE THE CAPITAL ACCOUNTS OF THE PARTNERS UNDER THE FIXED CAPITAL METHOD AND FLUCTUATING CAPITAL METHOD UNDER PARTNERSHIP ACCOUNTING. KINDLY WATCH THE VIDEOS IN PROPER SEQUENCE. THIS IS PART 2 OF " CAPITAL ACCOUNTS". KINDLY SHARE THIS VIDEO WITH YOUR FRIENDS ALSO. THANKS AND REGARDS.
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LearningTranscript
00:00Hello guys, hope you are doing well. This is Sonia Setia, your accounts and equity util.
00:07So in previous video, we saw the methods of making a partner's capital account.
00:15And we discussed the first method in which we saw how to make a fixed capital account method.
00:23And we discussed that the partner's capital account will always have a credit balance.
00:33So we said that we will discuss this in the next video.
00:37So for those who are new to this video, let's recap what we saw in the previous video.
00:46So in the previous video, we saw that we can make a partner's capital account in two ways.
00:52Fixed capital account and fluctuating capital account method.
00:55And in the fixed capital account method, we have to make two accounts.
00:59One is a capital account and the other is a current account.
01:02So we discussed how to make a capital account.
01:07And in the capital account method, we saw that your closing balance will always have a credit balance.
01:19So you will say that it is written on the debit side.
01:22But we will see why it came.
01:24In today's video, we will take an example and see why the credit balance will always come.
01:32So under fixed capital method, the capital account balance will always have a credit balance.
01:50Credit balance means the balance will be written on the debit side.
01:55Then why this is known as the credit balance?
01:58Because this balance came due to the bigger credit side.
02:02Your credit side was big.
02:04So where do you write it to balance your account?
02:08You are going to write it on the debit side.
02:10But why did it come?
02:12Because your credit side was big.
02:15That's why this balance came.
02:17That's why this balance is known as the credit balance.
02:21And why there will always be a credit balance in this account?
02:27We have already seen why it is called the credit balance.
02:30But why will there always be a credit balance?
02:37Because partners can't withdraw more than the invested capital.
02:43Can they withdraw more than the opening capital invested by the partners?
02:50No.
02:51We will also see that there are two types of drawings.
02:54Let's see this first.
02:56Because here in this account, we got drawings against capital.
03:01Let's take up an example to understand this concept.
03:05For this, we will also take an example.
03:07And we will see whether there is a credit balance or debit balance.
03:11So first you understand one more thing here.
03:15That the drawings are of two types.
03:20One is Drawings Against Profit.
03:28And the other is Drawings Against Capital.
03:37There are many students who don't know that there are two types of drawings.
03:43And they think both are the same.
03:46Drawings means drawings only.
03:48So there are two types of drawings.
03:51One is Drawings Against Capital and the other is Drawings Against Profit.
03:56So what is Drawings Against Profit?
04:01When the partner thinks that he is going to get so much profit,
04:04then he withdraws some amount against the profit from the firm.
04:10That is known as Drawings Against Profit.
04:13And what is Drawings Against Capital?
04:15You withdraw some amount from the capital itself.
04:21That is known as Drawings Against Capital.
04:25Since we are making a capital account,
04:28we had seen in the previous video.
04:30If you haven't seen it, then you can recheck it.
04:34If you haven't seen that video,
04:37then I don't think you will understand this concept well.
04:42So you can recheck the previous video.
04:46Then you can better relate this topic.
04:50We had made a capital account in Partners Capital Account.
04:56We had seen the format of our first capital account.
05:01We will see the current account later.
05:03We had discussed the format of the capital account.
05:09Now we want to see whether the credit balance comes out
05:14or the debit balance comes out.
05:16So I have made the format in this.
05:19Same Particulars XYZ and Particulars XYZ
05:24and the credit side also.
05:30So this is your format.
05:32So we will see in this.
05:34We will keep some figures and some amounts here.
05:37So we had seen in the format.
05:39Where are you going to keep the Buy Balance BD?
05:43On the credit side.
05:45And where will your closing balance come?
05:49To Balance CD.
05:53Suppose we have Buy Balance BD.
05:55Partner X has invested Rs. 3 Lakhs.
05:59And Partner Y has invested Rs. 2 Lakhs.
06:03And Partner Z has invested Rs. 1 Lakh.
06:07So this is what they have invested.
06:11You can write in this.
06:13You can also give the details of this.
06:15So this is your opening capital.
06:23Partner X has invested Rs. 3 Lakhs.
06:25Partner Y has invested Rs. 2 Lakhs.
06:27And Partner Z has invested Rs. 1 Lakh.
06:29Suppose they have invested some additional capital.
06:32By bank account.
06:36This is your additional capital.
06:40Suppose X has invested Rs. 50,000.
06:44And Suppose Y has invested Rs. 40,000.
06:48And Suppose Z has invested Rs. 30,000.
06:50Right.
06:52So.
06:54Let's see the drawings of this.
06:56They have done some drawings against capital.
07:00So let's write that too.
07:08Where are you going to write that?
07:10To Bank.
07:12Which is Drawings.
07:14Against Capital.
07:16Suppose X has drawn Rs. 50,000.
07:20And Y has drawn Rs. 60,000.
07:24And Z has drawn Rs. 80,000.
07:30So which is the bigger side?
07:34Which is the bigger side?
07:36Credit side.
07:38In which your balance is how much?
07:40Check this once.
07:42This is your Rs. 3 Lakhs.
07:44This is Rs. 50,000.
07:46So how much will be the total?
07:48This is the debit side.
07:50In this, you can see only Rs. 50,000.
07:52Right.
07:54So let's write the total below.
08:00That is Rs. 3 Lakhs.
08:04Rs. 50,000.
08:06So this side is bigger.
08:08So on both sides, the balance will be written.
08:10And this is Rs. 2 Lakhs.
08:12Rs. 40,000.
08:14And here only Rs. 60,000.
08:16Rs. 2 Lakhs.
08:18Rs. 40,000.
08:20And this is Rs. 1 Lakh.
08:22Rs. 30,000.
08:24Rs. 1 Lakh.
08:26Rs. 30,000.
08:28So this...
08:32Just a second.
08:36So we have done this.
08:38Total.
08:40Rs. 2 Lakhs. Rs. 40,000.
08:42This is the total. Rs. 2 Lakhs. Rs. 40,000.
08:44Credit side.
08:46And we have to write here.
08:48Rs. 2 Lakhs. Rs. 40,000.
08:50And Rs. 1 Lakh. Rs. 30,000.
08:52You have to show here also.
08:54So from this, you can see.
08:56Which balance did we get?
09:00Our credit side is bigger.
09:04Because of this,
09:06your closing balance.
09:08What did we get?
09:10Closing balance.
09:12You wrote on debit side.
09:14But this is known as the credit balance.
09:16Because your credit side was bigger.
09:18Because of this,
09:20you got this balance.
09:22So from here,
09:24you can prove that
09:26the capital account
09:28will always have
09:30the credit balance.
09:32You may get this question in the exam.
09:34Why does the capital account
09:36always have the credit balance?
09:38Prove it.
09:40So like this,
09:42you can understand
09:44why it has the credit balance.
09:46We will see the current account
09:48in the next video.
09:50Then,
09:52kindly like, share and subscribe
09:54my channel. Thank you so much.