A Company and Its Characteristics What is Company? A Company is an artificial entity created by a law that is distinct from its members and has the ability to carry a business in its own name. A Company can sue and can be sued, can borrow money, can open a bank account, has a common … Read more
Category Accountancy Class 12 Notes Chapter Chapter 1 – Accounting for Share Capital Topic Accounting Treatment Accounting Treatment – The books of accounts of a partnership firm are closed consequent to the order of dissolution passed by the court or mutual agreement between the partners. When a firm is dissolved it calls for settlement of … Read more
Settlement of Accounts – Dissolution of a partnership firm leads to cessation of business/ operating activities of the firm. This means that the business is no longer in existence and therefore the accounts need to be settled. The partnership firm disposes all its assets in order to meet its obligations. The rules for settlement of … Read more
Dissolution of a firm: Dissolving a partnership firm means stopping the business under the name of said partnership firm. For this situation, all liabilities are at last settled by selling off assets or transferring them to a specific partner, settling all accounts that existed with the partnership firm. Any profit/loss is transferred to partners in … Read more
Dissolution of Partnership Accounting is required when the relationship between the partners come to an end, this termination of agreement of partnership is known as dissolution of partnership. On dissolution of a firm, all the books of accounts of a firm are closed, all assets are sold and all liabilities are paid off. There are … Read more
Death of a Partner In case of death of a partner, the amount payable to him is to be paid to his legal representatives. The partnership between the partner comes to an end in case of death of the partner. The profit sharing ratios between the partners’ changes. The books of accounts are maintained in … Read more
Adjustment of Partners’ Capitals – When a partnership firm is reconstituted due to retirement or death of a partner, the continuing partners can come to an agreement where they decide to bring their capital contributions in proportion to their profit sharing ratio. This adjustment of capital amount is carried out by treating the sum of … Read more
When a partner decides to retire from the partnership firm, his account with the firm needs to be settled as per the conditions agreed to while entering in the partnership deed. The account settlement could be made either through a lump sum payment on the date of retirement or through instalments along with any interest … Read more
When a partner of a partnership firm decides to retire from the firm or when a partner is deceased, the profit sharing rate of the remaining partners changes. The share of the retiring/ deceased partner is divided between the continuing partners in the Gaining Ratio. The common procedure adopted by partnership firms is to divide … Read more
Ascertaining the Amount Due to Retiring/ Deceased Partner When a partner retires/dies, he becomes eligible to receive any amount due to him on account of accumulated profits or capital balances. To ascertain the amount due to retiring/ deceased partner a few additions and deductions are required to be made. To reach the level of ascertaining … Read more
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