AccountingCode 7707
Partnerships
What this topic asks you to be able to do
- the ways in which a partnership may operate as a trading, service or manufacturing business, or a mix of these
- the benefits and drawbacks of setting up a partnership
- why a partnership agreement matters and what it includes
- the reason for having an appropriation account
- the method for drawing up statements of profit or loss, appropriation accounts and statements of financial position
- how to record partners' salaries, interest on capital, interest on drawings and interest on partners' loans, and how the remaining profit or loss is shared out
- how to adjust financial statements in the ways set out in 5.1 (sole traders)
- what partners' capital and current accounts are for and how they differ
- the method for drawing up partners' capital and current accounts as ledger accounts and within a statement of financial position