Week 18 - Control Accounts, Partnership

Question 1

Partnership definition

Answer 1

Jointly owned by several partners, so equity must be attributed to each partner.

Initial investment made by each partner is shown in the capital account.

Economic values generated by each partners stake are attributed to them in the current account

Question 2

Partnership Characteristics
3

Answer 2

Unlimited liability
Partnership doesn’t pay taxes, owners do
Less financing opportunites

Question 3

Partners salaries
2

Answer 3

Partners salaries and interest on capital are considered to be transactions with owners rather than expenses

Profit remaining after salaries and interest are shared with partners according to the agreed profit-sharing ratio

Question 4

NEED TO KNOW HOW TO MAKE CAPITAL ACCOUNTS AND CURRENT ACCOUNTS

Answer 4

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