Which of the following is not a feature of the variable capital balances method (method 1) of accounting for partnership equity?
A) Interest on capital is credited to the partner's retained earnings accounts.
B) Each partner has one permanent capital account.
C) Partner's drawings are closed to their capital accounts.
D) The profit or loss distribution account is closed to the partner's capital accounts.

Question

Quizplus · Accepted Answer

In the variable capital balances method, interest on capital is usually credited to each partner's capital account, not their retained earnings accounts.

Which of the Following Is Not a Feature of the Variable