Ch 5 · Partnership Accounts

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

⭐ Important points (exam-critical)

• ⭐Hidden goodwill at admission = (Total Capital implied by new partner − Combined adjusted capitals).
• ⭐Joint Life Policy treatment depends on method (Surrender Value vs Premium expensed).
• ⭐On dissolution: realise assets, pay liabilities, settle partners (Garner v. Murray for insolvency).
• ⭐Interest on partner's loan is a charge (P&L), not appropriation.