Partnership Accounts

Partnership Fundamentals: Basic Concepts

  • Partnership is relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all.
  • Features of partnership are: it is an association of two or more persons, must come into existence by agreement, must .... Read More

Partnership Fundamentals:Final Accounts

  • Profit and Loss Appropriation account discloses how net profits of an accounting period have been appropriated. It comprises of all adjustments relating to partners like salaries, interest on capital etc.
  • It is different from profit & loss .... Read More

Past Adjustments & Guarantee

  • After closing the accounts, sometimes it is discovered that there is omission of salary, distribution of profits in the wrong ratio, omission of interest on capital or drawings, etc. Old accounts cannot be altered, so an adjustment entry is passed.
  • .... Read More

Goodwill- Concept and Mode of Valuation

  • Goodwill is benefit and advantage of good name, reputation and connections of a business.
  • Features of goodwill are: it is an intangible fixed asset, has no existence separate from that of business, helps to earn higher profits, etc.
  • Factors .... Read More

Change in Profit Sharing Ratio

  • The alteration in profit sharing ratio among existing partners in a partnership business is known aschange in profit sharing ratio.
  • Any change in profit sharing ratio involves an increase in share of profit of one or more partners and decrease in share of profi .... Read More

Admission of a Partner

  • Admission leads to Reconstitution of Firm as the existing agreement comes to an end and a new agreement comes into effect. A new partner may be admitted for increasing the capital, augmenting managerial skills, etc.
  • Rights of new partner are right to share asse .... Read More

Retirement of a Partner

  • When a partner leaves a partnership firm, it is known as retirement of a partner. Firm continues its business operations with continuing partners.
  • Adjustments required at the time of retirement are calculation of new and gainin .... Read More

Death of a Partner

  • Death of a partner dissolves the partnership. However, the firm may continue with a new partnership agreement.
  • In both the cases i.e.retirement or death, a partner leaves the firm, hence, claims will be settled almost in the same manner in both the cases.
  • .... Read More

Partnership :Dissolution

  • Dissolution of a partnership means discontinuance or cessation of partnership between all the partners of the firm. It means that firm closes down its business and comes to an end.
  • In dissolution of partnership, assets and liabilities are revalued and revaluati .... Read More

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