CHAPTER Partnership Accounting - Pearson

14 CHAPTERP artnership AccountingLEARNING OBJECTIVESWhen you have completed this CHAPTER , you a better understanding of Accounting the general characteristics of a Partnership and the importanceof each able to calculate the division of profits, prepare the proper journal entries,and prepare the financial statements for a able to calculate and prepare the journal entries for the sale of a partner - ship interest, the withdrawal of a partner , and the addition of a able to calculate and prepare the journal entries for a Partnership that isgoing out of form a balance sheet that shows assets on the left-hand side and liabilities andbalance sheetowner s equity on the right-hand sidedeficita deficiency in amount; , in this CHAPTER , a deficit balance in the capitalaccount is an abnormal, or a debit, balanceliquidationto settle the accounts and distribute the assets of a businessmutual agencythe legal ability of a partner to bind the Partnership to contracts within thescope of the partnershippartnershipa voluntary association of two or more legally competent persons who agree todo business as co-owners for profitprofit-loss ratiothe method chosen by partners for dividing the profits or losses; also called theincome and loss sharing ratiorealizationthe conversion of noncash assets to cashunlimited liabilityeach

and prepare the financial statements for a partnership. 4. be able to calculate and prepare the journal entries for the sale of a partner-ship interest, the withdrawal of a partner, and the addition of a partner. 5. be able to calculate and prepare the journal entries for a partnership that is going out of business. VOCABULARY

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  Financial, Partner, Partnership, Ship, Par tnership

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