Incomplete Record Partnership Firm

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Incomplete Records And Partnership Firms

The rules relating to the preparation of statements of profit from the incomplete records (or under single entry system) for a partnership firm are similar to those adopted in the case of a sole proprietorship business. Only the items of appropriations such as interest on capital, interest on drawings, partners’ salary, commission etc., have to be shown separately after calculating the profits before such appropriation. It means that final profit would be distributed between partners in their profit sharing ratio only when the items of appropriations have been either added to (such as interest on drawings) or deducted from the profits calculated, in usual manner, under statement of affairs method. However for preparing the statement of affairs in the beginning and at the end of the accounting period, only the respective combined capital figures are taken into consideration. It is only when the profits have been ascertained after the incorporation of appropriation items that the individual capital accounts are shown in the final statement of affairs at the end of the accounting period.

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