PARTNERSHIP ACCOUNT--Appropriation of profit 1) what is partnership account ? => the Indian partnership act 1932 , defines a partnership as '' the relation between person who have agreed to share the profit of a business carried on by all or any of them acting for all''2) what is partners ? => the act further states that person who have entered into partnership are called individually partners 3) partnership Agreement (or deed) : => The agreement determining the right of partners inter se may be in written , verbal or implied from the usual conduct of the partners . Whatever possible , an express agreement in written is advisable so that each partners becomes aware of his partnership terms . Such a written agreement is technically referred to as partnership deed . A list of the more important contents of partnership deed is enumerated below a) The duties and responsibility of each partners b) The amount of capital initially to be introduced by each partner .c) whether the partners ' capital contributions are to remain fixed or not d) the proportion in which profits and losses are to be shared .e) The salaries , if at all , to be paid to each partners . f) The method of the maintaining and auditing accounts .g) the admission of new partners and the retirement of existing partners . 4) Appropriation of profits : => The profit of a partnership firm may be appropriated either as such or partly in the form of interest of capital / loan , salary , commission ,etc . and the balance as profit .The mode of appropriation depends on the partnership agreement , in the absence of any agreement , section 13 of the partnership act will apply . According to this section , in the absence of any agreement to the contrary a) all partners are entitled to an equal share in the profit of the business , and must contribute equally towards the losses sustained by firm .b) A partners making any advance beyond the amount of capital which he has agreed to subscribe i.e., a loan is entitled to interest at the rate of 6%per annum from the date of advance c) A partners is not entitled to interest on the capital subscribed by him . d) No partners shall be entitled to any remuneration as salary or otherwise for acting in the partnership business .e) If partners are entitled to interest on capital as per agreement , such interest is payable only out of profit .
Basic Accounting definitions
ACCOUNTING: Accounting can be defined as the subject by studying which the records of all monetary transaction of an individual , non - trading concern ,business undertaking and other for a particular period can be satisfactorily maintained and the result of transaction during given period can be analysed and measured at the end of the given period .Accounting is now more an information system then a mechanism for recording transaction and ascertaining the result thereofFINANCIAL ACCOUNTING : financial accounting deals with the recording of all financial transaction and preparation of statement for the use by management , outsiders like shareholders , banks or other financial institution , creditors etc.COST ACCOUNTING : Cost accounting is concerned with the ascertainment of all cost of various products and services and is used as the tool for controlling expenditure..
What is Account ?
Definitions of AccountIn accounting, an account is a record in the general ledger that is used to sort and store transactions. For example, companies will have a Cash account in which to record every transaction that increases or decreases the company's cash. Another account, Sales, will collect all of the amounts from the sale of merchandise. Most accounting systems require that every transaction will affect two or more accounts. For example, a cash sale will increase the Cash account and will increase the Sales account.The term account is also used in transactions where suppliers sell goods to customers and grant credit terms such as net 10 days. In those situations, a supplier is selling goods on account and the customer has purchased goods on account. The supplier has also increased the balance in it's current asset account entitled Accounts Receivable and the customer will increase the balance in its current liability account entitled Accounts Payable.
Introduction to Accounting BasicsThis explanation of accounting basics will introduce you to some basic accounting principles, accounting concepts, and accounting terminology. Once you become familiar with some of these terms and concepts, you will feel comfortable navigating through the explanations, quizzes, quick tests, and other features of AccountingCoach.com.Some of the basic accounting terms that you will learn include revenues, expenses, assets, liabilities, income statement, balance sheet, and statement of cash flows. You will become familiar with accounting debits and credits as we show you how to record transactions. You will also see why two basic accounting principles, the revenue recognition principle and the matching principle, assure that a company's income statement reports a company's profitability.In this explanation of accounting basics, and throughout all of the free materials and the PRO materials—we will often omit some accounting details and complexities in order to present clear and concise explanations. This means that you should always seek professional advice for your specific circumstances.
Management accounting notes for BBA , MBA and BCOM