Here students can locate TS Inter 2nd Year Accountancy Notes Chapter 4 Partnership Accounts to prepare for their exam.
TS Inter 2nd Year Accountancy Notes Chapter 4 Partnership Accounts
→ Partnership is an association of two or more persons to carry on, as co-owners, a business and to share its profits and losses.
→ According to the partnership Act 1932 section 4, partnership means “The relationship between persons who have agreed to share profits of the business carried on by all or any one of them acting for all”.
→ Partnership Deed is a document that defines the rights and liabilities of partners of the firm besides containing other matters pertaining to the conduct and management of the firm.
→ There are two methods of preparing partners’ capital accounts:
- Fixed capital method &
- Fluctuating capital method.
→ Fixed capital account method means capital account for each partner remains unchanged means fixed.
→ Fluctuating capital method: This means all the transactions related to partners are recorded in the capital account. So, the capital account is fluctuates year to year.
→ P & L Appropriation a/c is an account is prepared to show all the remaining items relating to the partners which are not recorded in the profit and loss account.
→ Final accounts/Financial statements of the partnership firm:
- Trading Account
- Profit and Loss account
- Profit and Loss appropriation account and
- Balance Sheet.