Principles of Accounting: Partnerships: Basic guidelines when answering questions

• As we will continue to emphasize throughout the topic
• You ought to pay attention to the requirements of the question and follow these
• Where there are no guidelines or the question is silent remember the following provisions:
  • Profits and losses are to be shared equally
  • There is to be no interest allowed on capital
  • No interest is to be charged on drawings
  • Partners are not entitled to salaries
  • Partners who put a sum of money into a partnership in excess of the capital they have agreed
    to subscribe are entitled to interest at the rate of 5 per cent per year on such an advances
• Also wherever possible use columnar Capital Accounts and Current Accounts it saves time and is more convenient
• Always use current accounts and capital accounts instead of fluctuating capital accounts unless otherwise instructed

To access more topics go to the Principles of Accounts Notes.