1. One aspect that partnership differs from sole proprietorship is the plurality of capital and drawing accounts. 2. When the partnership borrows money from the partners, there is a debtor- creditor relationship, the partnership as a debtor and partners as creditor. 3. In the absence of any agreement on how profit and losses are divided, the Philippine Law on Partnership provides that the share of each partner in the profits and losses should be in proportion to what he has contributed. The profit in a partnership business is closed to partners' drawing account and not to capital accounts. 5. The Statement of Changes in Partners' Equity shows the Partners' Equity, Beginning plus Profit and Less Partnership's Drawing. 6. Partnership follows the same accounting cycle as in sole proprietorship. 7. A newly organized partnership should always open a new set of books of accounts... An industrial partner is not exempted from sharing in the loss of the partnership if he is also a capital partner. 8.
1. One aspect that partnership differs from sole proprietorship is the plurality of capital and drawing accounts. 2. When the partnership borrows money from the partners, there is a debtor- creditor relationship, the partnership as a debtor and partners as creditor. 3. In the absence of any agreement on how profit and losses are divided, the Philippine Law on Partnership provides that the share of each partner in the profits and losses should be in proportion to what he has contributed. The profit in a partnership business is closed to partners' drawing account and not to capital accounts. 5. The Statement of Changes in Partners' Equity shows the Partners' Equity, Beginning plus Profit and Less Partnership's Drawing. 6. Partnership follows the same accounting cycle as in sole proprietorship. 7. A newly organized partnership should always open a new set of books of accounts... An industrial partner is not exempted from sharing in the loss of the partnership if he is also a capital partner. 8.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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Transcribed Image Text:True or False
Instruction: Write "T" if the statement is correct and "F" if incorrect.
1.
One aspect that partnership differs from sole proprietorship is the plurality
of capital and drawing accounts.
When the partnership borrows money from the partners, there is a debtor-
creditor relationship, the partnership as a debtor and partners as creditor.
2.
3.
In the absence of any agreement on how profit and losses are divided, the
Philippine Law on Partnership provides that the share of each partner in the
profits and losses should be in proportion to what he has contributed.
The profit in a partnership business is closed to partners' drawing account
and not to capital accounts.
4.
5. The Statement of Changes in Partners' Equity shows the Partners' Equity,
Beginning plus Profit and Less Partnership's Drawing.
6. Partnership follows the same accounting cycle as in sole proprietorship.
7. A newly organized partnership should always open a new set of books of
accounts...
An industrial partner is not exempted from sharing in the loss of the
partnership if he is also a capital partner.
8.
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