Ch 5 · Partnership Accounts

📘 Core concepts

1. 1Partnership: relation between persons who agree to share profits of a lawful business.
2. 2Indian Partnership Act 1932 governs; in absence of deed — equal profit, no interest on capital, 6% p.a. on loan.
3. 3Goodwill = excess earning capacity; valued at admission, retirement, death.
4. 4Capital methods: Fixed (Capital + Current A/c) or Fluctuating (one A/c).
5. 5P&L Appropriation A/c distributes profit (interest on capital, salary, share).