Lesson 22 - Accounting for Partnership
Learning Goals: By the end of this lesson you will be able to
1.Allocate and record profit or loss to
partners.
2.Prepare partnership financial statements.
3..Account for the admission of a partner.
Critical Thinking
If a partner is entitled to a salary, it is dealt with as part of the appropriation of profit. It is not an expense of the business, and should not be charged to the income statement in order to calculate profit. Only salaries paid to employees of the business are charged to the income statement.
What do you think is the reason for this?