Learning Accounting For Partnership Firms

Accounting For Partnership Firms  

1. PartnershipTopic Keywords
   • how to find partners 
   • are you searching for firm partnership
   • partnership development powerpoint
   • videos to read accountancy
   • partnership tax returns

   Learning Objectives:-  

   After studying this chapter the student will be confident to:

   • Understand and explain the meaning of partnership
   • Understand the characteristics of Partnership
   • Explain the meaning and contents of partnership deed.
   • Apply their provisions of Partnership Act, 1932 in the absence of partnership deed.
   • Prepare partners’ Fixed and fluctuating capital Accounts.
   • Calculate interest on Capital and Drawings.
   • Distribute profit among partners and prepare Profit and Loss Appropriation A/c.
   • Make the accounting treatment of past adjustment. 
    

SALIENT POINTS:        

1. Partnership deed: It is a document which contains the terms and conditions of Partnership agreement either oral or written.
2. Profit and Loss Appropriation Account : After the preparation of Profit and Loss account, entries pertaining to Interest on Capital, Drawings , Salaries among the partners are shown separately in a newly opened Profit and Loss Appropriation Account.
3. Rules applicable in the absence of Partnership Deed :
   • a) Profit sharing ratio will be equal
   • b) No Interest on Capital and Drawings
   • c) No Remuneration or Salary to the partners.
   • d) Interest on Loan advanced by the partner @6%p.a.
    
4. Fixed and Fluctuating Capital Accounts : When the Capitals are fixed, the Current account of the partners will be maintained. 
       Here is a video for your better understanding ! and keep reading keep sharing. :)