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Unformatted text preview: Partnership Accounting Except for the number of partners' equity accounts, accounting for a partnership is the same as accounting for a sole proprietor. Each partner has a separate capital account for investments and his/her share of net income or loss, and a separate withdrawal account. A withdrawal account is used to track the amount taken from the business for personal use. The net income or loss is added to the capital accounts in the closing process. The withdrawal account is also closed to the capital account in the closing process. Asset contributions to partnerships When a partnership is formed or a partner is added and contributes assets other than cash, the partnership establishes the net realizable or fair market value for the assets. For example, if the Walking Partners company adds a partner who contributes accounts receivable and equipment from...
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This note was uploaded on 11/15/2011 for the course ACCT 2310 taught by Professor Staff during the Spring '09 term at Texas State.
- Spring '09