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Accountancy · Ch 1 — Accounting for Partnership: Basic Concepts

Special Aspects of Partnership Accounts

1.3

Special Aspects of Partnership Accounts

Once a partnership firm is formed, its day-to-day accounting is largely the same as for a sole proprietorship — recording purchases, sales and expenses, and preparing the Trading and Profit and Loss Account, works exactly the same way. What changes is that a partnership has more than one owner, so a handful of additional aspects need their own treatment:

  • Maintenance of Partners' Capital Accounts
  • Distribution of Profit and Loss among the Partners
  • Adjustments for Wrong Appropriation of Profits in the Past
  • Reconstitution of the Partnership Firm
  • Dissolution of the Partnership Firm …