Chapter 12, Problem 12.2BE

To determine

Partnership: An association of two or more than two parties with the objective of sharing profit and losses is called Partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules.

Balance sheet

The balance sheet of a Company is the one of the most important financial statements because it shows the financial position of the Company.

Main components of balance sheet are assets, liabilities and stockholder’s equity.

$\text{Assets }=\text{ Liabilities}+\text{Stockholders' equity}$

To indicate: The accounts which will appear in the balance sheet.