Capital and current accounts: The partnership agreement provides for a fixed amount of capital to be contributed by each partner, it is preferable for the amounts therefore to be credited to the respective partners’ capital accounts, and for partners’ drawings, salaries, interests on capital and shares of profits to be dealt with the current account. This enables a clear distinction to be made in the accounts between fixed capital and not drawn profits. Partners’ loan accounts Where a partner makes an advance to the firm as distinct from capital, the amount therefore should be credited to a separate loan account…