TAILIEUCHUNG - Lecture Accounting principles – Chapter 12: Accounting for partnerships

In this chapter students will be able to: Describe the characteristics of the partnership form of business organization, account for the formation of a partnership, allocate and record profit or loss to partners, prepare partnership financial statements, account for the admission of a partner,. | Accounting for Partnerships Partnership form of organization Characteristics Advantages and disadvantages Partnership agreement Basic partnership accounting Forming a partnership Dividing partnership profit or loss Partnership financial statements Admission and withdrawal of partners Liquidation of a partnership With or without a capital deficiency Copyright John Wiley & Sons Canada, Ltd. 2 CHAPTER 12: Accounting for Partnerships Describe the characteristics of the partnership form of business organization. Account for the formation of a partnership. Allocate and record profit or loss to partners. Prepare partnership financial statements. Account for the admission of a partner. Account for the withdrawal of a partner. Account for the liquidation of a partnership. Copyright John Wiley & Sons Canada, Ltd. 3 Characteristics of Partnerships Copyright John Wiley & Sons Canada, Ltd. 4 Characteristics of Partnerships 2 Association of individuals Usually based on a written agreement A legal and accounting entity, but not taxed Co-ownership of property Assets are jointly owned by partners Division of profit Partners determine how profit or loss is to be divided Otherwise shared equally Limited life Partnership ends when change in ownership New partnership can be formed to continue business Copyright John Wiley & Sons Canada, Ltd. 5 Characteristics of Partnerships 3 Mutual agency Each partner acts for (binds) the partnership Unlimited liability Each partner is liable for all partnership liabilities Special types of partnerships created to limit liability Limited partnership (LP) Limited liability partnership (LLP) Copyright John Wiley & Sons Canada, Ltd. 6 Partnership Agreement Written contract between two or more parties to form a partnership Contains basic information: Name and location of firm Purpose of the business Date of inception Specifies relationship of partners: Names and capital contributions of partners Rights and duties of partners Basis for sharing profit or .

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• Accounting principles
• Lecture Accounting principles
• Financial reporting
• Accounting for partnerships
• Partnership agreement
• Partnership accounting
• Fundamental accounting principles
• Lecture Fundamental accounting principles
• Accounting information systems
• Fundamental system principles
• Technology based accounting systems
• Accounting information
• Financial accounting
• Managerial accounting
• Managerial cost
• Reporting manufacturing activities
• Merchandising operations
• Accounting cycle
• Completing the accounting cycle
• Classified balance sheet
• Partnership form of organization
• Basic partnership accounting