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Enumerate and define the two equity accounts that would have to be maintained for every partner in a partnership book of accounts?

Enumerate and define the two equity accounts that would have to be maintained for every partner in a partnership book of accounts?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Discussion Questions 1. Enumerate and define the two equity accounts that would have to be maintained for every partner in a partnership book of accounts? 2. Enumerate four reasons why the partner's capital account may be increased. 3. What are the different ways of dividing partnership profits and losses? 4. What does the law provide if there was no agreement between or among the partners regarding the distribution of profits and losses? 5. What does the law provide if there was an agreement among partners regarding the distribution of profits but no stipulation was made regarding distribution of losses? 6. What are the factors that can be considered in deciding what particular scheme of profit and loss sharing may be adopted by the partnership? 7. What are the three possible bases that can be used in computing capital ratios? Which of these three bases would give a more equitable profit or loss distribution? 8. What is meant by "salary allowances" to partners? What is the normal treatment to this? 9. What is meant by "bonus" given to partner/s? How is this recorded in the books? 10. Enumerate some of the differences in the financial statements of a partnership and sole proprietorship.
Transcribed Image Text:Discussion Questions 1. Enumerate and define the two equity accounts that would have to be maintained for every partner in a partnership book of accounts? 2. Enumerate four reasons why the partner's capital account may be increased. 3. What are the different ways of dividing partnership profits and losses? 4. What does the law provide if there was no agreement between or among the partners regarding the distribution of profits and losses? 5. What does the law provide if there was an agreement among partners regarding the distribution of profits but no stipulation was made regarding distribution of losses? 6. What are the factors that can be considered in deciding what particular scheme of profit and loss sharing may be adopted by the partnership? 7. What are the three possible bases that can be used in computing capital ratios? Which of these three bases would give a more equitable profit or loss distribution? 8. What is meant by "salary allowances" to partners? What is the normal treatment to this? 9. What is meant by "bonus" given to partner/s? How is this recorded in the books? 10. Enumerate some of the differences in the financial statements of a partnership and sole proprietorship.
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