Self-test Lane and Hill have decided to form a partnership. Lane is to contribute £150,000 as capital and Hill £20,000.

Hill is to work full-time in the business and Lane, one day a week. Because Hill has no other income, she anticipates making drawings of £1,000 per month from the partnership.

Lane expects to make drawings of about £1,000 per quarter (every three months).

Using the information above, explain the difference between each of the following ledger accounts in the books of a partnership:

(a) capital account;

(b) current account;

(c) drawings.