Multiple choice

Current A/c is prepared when

  1. the capital is fixed

  2. the capital is fluctuating

  3. the capital is both fixed and fluctuating

  4. None of these

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When capital is fixed, because it remains unaltered unless additional capital is introduced or withdrawn, so all the adjustments of interest on drawings, profit or losses etc. are made in the current  A/c.