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.
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