Can you have negative capital accounts on the balance sheet?
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If a partner withdraws from a partnership and receives more cash than the amount recorded in the appropriate capital account, what accounting does the business make of the excess payment?
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Short (149 words) discussion in everyday language including an example. Suitable for novice to intermediate.
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The accounting entry would be to debit the partner's capital account and credit cash, leaving the partner's capital account as a debit balance (negative partner capital).
It is possible to have a negative capital account for a partner, assuming the ...
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