Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 17 - No. 32)
What is the main difference between a 'current account' and a 'capital account' for a partner?
Capital accounts record interest on capital, while current accounts record drawings.
Capital accounts record the initial investment, while current accounts record ongoing transactions like salaries and profit shares.
Capital accounts are used at the end of the year, while current accounts are used throughout the year.
There is no difference, as they are the same thing.
Explanation
Capital accounts record the initial investment and any subsequent contributions, while current accounts track transactions like drawings, salaries, and profit distributions.
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