Partnership is a deal between two or more people to manage a busniess and share its return. The allocation of profit and loss between the partners are based on profit sharing ratio given in the partnership deed. If no priority system is followed, then the profit and loss will be divided equally. The partnership deed which contains all the clauses with regard to the working and calculations of profits of partnership is also known as partnership agreement. To prepare: The memo that communicates the thoughts regarding the agreement.

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Chapter 13, Problem 2E

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Concept Introduction:

Partnership is a deal between two or more people to manage a busniess and share its return. The allocation of profit and loss between the partners are based on profit sharing ratio given in the partnership deed. If no priority system is followed, then the profit and loss will be divided equally. The partnership deed which contains all the clauses with regard to the working and calculations of profits of partnership is also known as partnership agreement.

To prepare: The memo that communicates the thoughts regarding the agreement.

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