Recognition and Measurement

PARTNERSHIP
Basic Concepts and
Formation
Nature and Characteristics
Definitio

Partners Role

A partnership is an organization put

up by two
or more persons
contributing money, property or
industry into a common fund with the
purpose of dividing the profits among

Kinds of Partnership
Partners

Accounting for a Partnership

Partners Interest
Right over Assets

Partners Equity

Element
-A valid contract, whether oral or
written, is necessary.
-Two or more persons having legal
capacity to enter into a contract.
-Contributions may be in the form
of money, property or service.
-The purpose of the business is to
divide
the
profits
among

Attributes
A partnership has the attributes of
a sole
proprietorship
and
a

As to liability: A General Partnership

and A Limited Partnership. As to
properties: A Universal Partnership
of Property and A Universal
Partnership of Profit

Partner, Capital
Partner,
-Investments
-Permanent drawings

Compliance
with agreed
capital
Statement of
Partners Equity
Statement of
Financial Position
-Cash Method
-Bonus Method
-Asset revaluation or

-Profit share
-Regular drawings
-A co-owner of the partnership
property.
-Liable to the partnership creditors
individually and up to the extent of
ones personal properties.
-Partnership is bound by the act of
a partner.

Right over Profits

Kinds of Partners
General,
Limited,
Capitalist,
Industrial,
Real,
Nominal,
Ostensible, Secret, Universal, and

Articles of Co-Partnership

Actual contributions
against: