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Partnership and Corporation Accounting

Partnership and Corporation Accounting

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Published by Orestes Mendoza
Accounting Lesson
Accounting Lesson

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Categories:Types, Reviews
Published by: Orestes Mendoza on Mar 15, 2013
Copyright:Attribution Non-commercial

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10/19/2013

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 1
Chapter 1
Review of Accounting Process
Nature of accounting
Accounting is a service activity
Accounting is the language of business
Function of accounting
Main function
 –
to provide quantitative information, primarily financial in nature, abouteconomic entities, that is intended to be useful in making economic decision.
Basic function
 –
to record and report accurately the economic reality of the business.
Audit function
 –
to test the truthfullness of the financial reports, to trace fraudelenttransactions and to locate and rectify accounting errors.
ACCOUNTING CYCLE
Identification of events to berecordedJournal entries
are posted to the
ledgerPreparation of the trial balanceAdjusting journalentries are journalizedand ostedClosing journalentries are journalized andpostedPreparation of thepost-closing trial
balance
Preparation of the financialstatementsPreparation of the worksheetincludingadjusting entriesReversing journalentries are journalized andpostedTransactions are
recorded in the
 journal
 
 2
Chapter 2
 
Nature of Partnership Business
Definition of PARTNERSHIP:
“By the contract of the par 
tnership, two or more persons bind themselves to contributemoney, property and industry to a common fund with the intention of deviding the profitsamong themselves. Two or more persons may also form a partnership for the exercise of aprofession.
CHARACTERISTICS OF A PARTNERSHIPBased on contractLimited LifeAssociation of individualsEase of FormationUnlimited LiabilityAssignment of InterestCo-OwnershipIncome ParticipationMutual Agency
 
 3
ADVANTAGES and DISADVANTAGES of PARTNERSHIP
Advantages Disadvantages
Ease of Formation Unlimited LiabilityJoint Resources Mutual AgencyTax Exemption ConsensualLess Govenrment Supervision Limited Life
Kinds of Partnerships
1. As to nature of business
Trading Partnership
Non-Trading Partnership2. As to Purpose
Commercial Partnership
General Professional Partnership3. As to Object
Universal Partnership
o
Of all present Partnership
o
Of Profits
Particular Partnership4. As to Liability
General Partnership
Limited Partnership5. As to Duration
Partnership at Will
Partnership with a fixed term

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