Explanation:

In partnership accounting, there are two types of capital account methods:

1. Fixed Capital Account Method
2. Fluctuating Capital Account Method

Under the Fixed Capital Account Method, the capital balance remains unchanged unless there is additional capital introduced or capital withdrawn permanently.

• Only capital transactions (introduction or withdrawal) affect the Capital Account.
• Other transactions such as interest on capital, drawings, salary, and share of profit/loss are recorded in a separate Current Account and do not impact the Capital Account directly.

Since capital is not adjusted frequently, it always maintains a credit balance unless there is a permanent withdrawal reducing it.

Why Not Other Options?

• Option A (Debit) 

  • A debit balance in the capital account occurs only in exceptional cases like heavy losses leading to a negative net worth. Under normal circumstances, capital accounts do not show a debit balance in a fixed capital method.

• Option C (Zero) 

  • The capital account does not become zero unless the partner completely withdraws their entire capital from the business, which is rare in a running partnership.

• Option D (Negative) 

  • The capital account will not show a negative balance under the fixed capital method because losses are adjusted through the current account, not the capital account.

Final Answer:

 B: Credit