3.15 Partnership accounts


Additional information

Prepare and comment on the financial statements of partnerships.

Financial statements are:
  • income statement
  • appropriation account
  • statement of financial position.

Preparing financial statements will involve the calculation and recording of:

  • interest on capital
  • interest on drawings
  • partnership salaries
  • interest on a partner’s loan
  • shares of profit and losses
  • revaluation of assets and treatment of goodwill.

Prepare capital and current accounts of partners.

Financial statements and partners’ accounts could require the application of the relevant terms of the Partnership Act 1890 for partners operating without agreement.

Account for changes in partnership.

Changes in partnership are:

  • the retirement of a partner
  • the admission of a new partner.

Note: the dissolution of partnerships will not be examined.