Commerce Aspirant Admission of a partner involves addition of a new partner into the partnership business by the existing partners. This would results in change in profit sharing ratio of the existing partners. A partner may be admitted into the partnership firm under the following circumstances: When there is requirement of additional capital The partnership firm needs … Read more
Reconstitution of a Partnership firm means change in the existing agreement leading to the formation of a new agreement with certain variations. Reconstitution implies rearrangement of the partnership firm. This affects the exiting relationship among the members/partners and gives rise to a changed structure of the firm. Modes of Reconstitution of a Partnership Firm – … Read more
Guarantee of Profit to a Partner – When a new partner is admitted to the partnership firm, he/she becomes eligible to share the profits earned by the firm in the agreed profit sharing ratio. For eg – A and B are partners in a firm and they admitted C as a new partner as they … Read more
Past Adjustments – While preparing the books of accounts of any partnership firm, a lot of attention is given to the fact that there are no errors so that the final results display the financial information accurately. This provides a true and fair financial position of the firm which helps in better decision making for … Read more
Distribution of Profit and Losses in Partnership Examples: When there is a change in the profit sharing ratio among the partners then all the accumulated profits and reserves are distributed between them in the old ratio. This is done, because at present the partners share their profits or losses in old profit sharing ratio whereas … Read more
Partners Capital Account is an equity account in the accounting records of a partnership. A separate capital account is to be maintained for each partner and the capital contributed by each of them is credited to this account. The capital account of partners can be maintained in any of the following two ways: Fixed Capital Account Fluctuating Capital … Read more
Partnership Deed is the written agreement between the partners, which is duly signed and registered under the Act and contains all the terms and conditions which govern the operation of the activities of the partnership firm. Since partnership results out of an agreement, it is essential that there must be some terms and conditions agreed … Read more
Define Partnership in Accounting Partnership firm involves two or more people, who join together to earn profits. Accounting for partnership firms involves preparing and maintaining the full set of accounts for the firm where all income, expenses, partners contribution, drawings etc. are recorded. As per the Section 4 of The Partnership Act, 1932, “Partnership is … Read more
The Syllabus of Accountancy Class 12 CBSE Notes comprises of the following chapters. We have prepared various notes along with detailed questions and their solution for Accounts class 12, who may be studying in CBSE, ISC or as per the NCERT syllabus. Find the Question Paper for Accounts Examinations CBSE Class 12. Syllabus of Accountancy Class … Read more
Peculiar Items of Non Profit Organisation (NPO) Although a non profit organisation class 12 prepares its financial statements on the same lines as that of a company, however, there are a some peculiar items which vary in terms of their nature. They require special treatment in the financial statements. Some of the peculiar items are … Read more