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Partnership1 Intro
Partnership1 Intro
Characteristics of a Partnership
Advantages of a Partnership
Disadvantages of a Partnership
Kinds of Partnerships
1. 1. According to activity
a. 2. According to liability
a. 3. According to object
a. a. Universal partnership of all present property one in which
the partners contribute all the property which actually belong to
each of them, at the time of the constitution of the partnership, to a
common fund with the intention of dividing the same among them
as well as the profits which they may acquire therewith. All assets
contributed to the partnership and subsequent acquisitions become
common partnership assets.
Kinds of Partners
a. According to Investment
c. According to Participation
The written agreement among the partners governs the formation, operation and
dissolution of the partnership and is required to be registered with SEC. It
contains the following information:
PARTNERSHIP FORMATION
Accounting entries to record the formation of a partnership will depend upon how
the partnership is formed. A partnership may be formed in the following ways,
namely:
1. 1. Formation of a partnership for the first time by individuals.
2. 2. Conversion of a sole proprietorship to a partnership
b. a. A sole proprietor allows another individual who has no
business of his own to join the business.
c. b. Two or more sole proprietors form a partnership.
General Guidelines
a. 1. Cash investments are recorded using their face values.
Note: These
adjustments are
similar to the
year-end
adjusting entries.
Only, replace the
nominal accounts
with the Owner,
Capital account.