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Partnership Accounts

Accounts of a Firm are not different from that of a Accounts of the Partnership Firm. Same Rules of Journal entries, Maintaining Ledger, Trial Balances and Final Accounts are also need of the Partnership Frim to get information on Financial Information. The Only Difference is that due to more than 1 person (at least 2 person) the profit is being distributed to the partner instead to the single proprietor and that is any payments to the partners regarding salary, rent to the partner, interest on capital, interest on drawing, interest on loan and other payments to the partners are appropriation of profit and an additional account i.e. Profit and Loss Appropiration Account is required with one more differene that the capital of all the partners separately shown in the balance sheet which is shown singly for the proprietor. 

In absence of Partnership Deed or Dees is silent about these points
Vijay Gulya, Chartered Accountant

--- Interest on Capital - A partner who has contributed some capital to the firm is allowed interest on Capital on his capital from the profit of the partnership firm earned during the period. Such Interest on Capital is not a charge against the profits unless mentioned clearly.  No Interest on Capital is allowed if partnership deed is not made between the partners or if there is no provision in the partnership deed regarding interest on Capital of the partners.

--- Interest on Drawings - Since it is income of the firm, Question of Charge against profit do not arise and partners has to pay the Interest on drawing as per the partnership Deed. No Interest on Drawings are paid by the partner if there is no partnership ded or if there is no provision in the partnership deed for interest on drawings.

--- Interest on Laon - Interest on Loan to be given to the partners is an expense of the firm and is required to be paid to the partners as per the partnership deed. If there is no partnership deed or there is no provision in the partnership deed interest on Loan to be paid to the partner @ 6 percent per annum for all periods during the outstanding amount of the loan.

--- Salary to the partners- Salary to the partner is to be given if it is provided in the partnership deed. But in Absence of partnership deed or if there is no provision of salary to the partner in the partnership deed, no salary of whatsover will be given to the partnersh.

--- Profit Sharing Ratio- Partners will distribute the profit as per the partnership deed but if there is no provision in the partnership deed rgarding distributing of the profits of the firm, or there is no partnership deed, profit or loss shall be distributed in between the partners equally.

--- No New Admission is possible unless all the partners agreed to the admission of if there is provision in the partnership ded regarding admission of new partner.

Other Topics

--- Profit and Loss Distribution Account

--- Fixed and Flactuating Capital method

--- Gurantee of Profit to the Partner

--- Adjustment Entries

--- Admisson of the Partner

--- Revaluation Account

--- Goodwill - nature and calculation method

--- Goodwill - Accounting Enries

--- Profit sharing ratio and entries

--- Retirement and death of partners

--- Dissolution of the partnership firm

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