Final answer:
The statement that a partner's capital account is debited for additional investments and credited for profits is false. In partnerships, additional investments credit the capital account, while profits debit the account.
Step-by-step explanation:
The statement 'The partner's capital account is debited for additional investments and credited for his share in the partnership profits' is false.
In accounting for partnerships, the partner’s capital account is credited when the partner makes additional investments into the business, as this increases the partnership's obligations to that partner.
Conversely, the capital account is debited for the partner's share of profits because this represents the earnings that are due to the partner which decreases the partnership's obligations to that partner.
Partnerships are a common business structure with specific characteristics that affect how they operate. One key aspect of partnerships is the way profits, losses, and additional investments are accounted for, which directly impacts partners’ capital accounts.
However, it is vital to remember that the main disadvantages of this business structure are related to liability. Each partner is responsible for the other's actions, and personal assets might be at risk due to personal liability for the business’s debts.