Ch 5 · Partnership Accounts

5 concept points · 5 formulas · 4 exam-critical points.

📘 Core concepts

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