PARTNERSHIP ACCOUNTING – ACCT_102

Part 2 lesson

Reason why people form a Partnership

- Larger capital can be raised
- Easy to form

Essential features of Partnership Agreement (Partnership Deed)

- Distribution of profit and losses
- Interest on capital
- Interest on drawing
- Partnership salary

PLURALITY OF CAPITAL AND DRAWING ACCOUNT

DEBIT
- Personal withdrawal
- Share un partnership loss from operations
- Debit balance of drawing account closed to capital

LOANS RECEIVABLE
- Money advance by partnership to partner
- Payable with interest by partners
- Due from partners
LOANS PAYABLE
- Money advance by partnership to partner
- Payable with interest by partners
- Due from partners
FORMATION OF A PARTNERSHIP (2 OR MORE PERSONS)
FORMATION OF A PARTNERSHIP (SOLE PROPRIETOR + INDIVIDUAL)
Normal Balance – Capital a credit balance.
Decrease in Liability – Capital credit balance.
Increase in Liability – Capital debit balance.
REMEMBER: to use books.
CLOSE ACCOUNTS – reverse to zero down
Normal balance of inventory – debit
Normal balance of accumulated Dep – credit
Normal balance of allowance for doubtful accounts – credit
KEY TO ADJUSTING ENTRIES – ano ang dulugangan nga accounts.
When you have a problem solving
Put in the data
Himay himay
calculate
Simplify the process