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ACCT 401 Chapter 13
Terms in this set (9)
An association of two or more people for the business as co-owners.
Common examples of partnerships
professional services including the practice of accounting or law, real estate investment/development companies.
The capital account
A permanent account. Measures a partner's interest in the net assets of the partnership. Does not report fair value or tax basis.
What is debited on the capital account?
Withdrawals in excess of a specified amount. Closing of a net debit balance in the partner's drawing account. Partner's share of partnership losses.
What is credited on the capital account?
Initial and subsequent investments of capital. Partner's share of partnership profits.
A temporary account. Periodically closed to capital accounts.
What is debited on the drawing account?
Periodic withdrawals of partnership assets up to a specified amount.
What is credited to the drawing account?
Closing of balance to partner's capital account.
Allocation of profit deficiencies and losses
1. Completely satisfy all provisions of the profit and loss agreement and use the profit and loss ratios to absorb any deficiency or additional loss caused by such action or
2. Satisfy each of the provisions to whatever extent is possible.
THIS SET IS OFTEN IN FOLDERS WITH...
ACCT 401 Chapter 4
ACCT 401 Chapter 5
ACCT 401 Chapter 10
ACCT 401 Chapter 14
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