Adjust account in the Partnership Agreement in a few clicks

Aug 6th, 2022
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How to adjust account in the Partnership Agreement

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[Music] we are continuing with our discussion on partnerships and last time we looked at the accounts of a partnership we looked at some of the facts uh that of course uh surrounding the partnership business and some of the things we talked about which are again echoed in the lecture video are the fact that a partnership is a formation of two or more people a minimum of two and a maximum of 20. we talked about the different types of partners we have the general partners and limited partners again this is covered in the lecture video we talked about some of the contents of a partnership did and again we mentioned that if there is no partnership deed or in the absence of the partnership date then the law has already been framed for you and the partnership act 114 of the laws of uganda are going to apply on your partnership then we say that like any other business a partnership maintains books of accounts and among those we have the income statement we have the balance sheet we mentioned

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Except for the number of partners equity accounts, accounting for a partnership is the same as accounting for a sole proprietor. Each partner has a separate capital account for investments and his/her share of net income or loss, and a separate withdrawal account.
What are the usual adjustments in partnership accounts? Partnership Accounting Procedures usually require the adjustment of amounts such as interest on capital, drawings, salary, commission, and share of profits to be made through the profit and loss appropriation account.
Partners may amend their partnership agreement at any time with the unanimous consent of all partners, ing to the Revised Uniform Partnership Act.
Step 1: Calculation of Total Capital of the firm on the basis of the new partners capital. Step 2: Dividing Total Capital in the new profit-sharing ratio to determine the new capital of each partner (Proportionate Capital). Step 3: Determining the adjusted present capital of the old partners.
In a partnership firm, sometimes errors occur or some omissions may have happened while recording the transactions and these are found out after the final accounts have been prepared. Then these adjustments are made to nullify the effects of those omissions.
A partners adjusted (outside) basis refers to the partners investment in a partnership. The basis is determined without considering any amount shown in the partnership books as capital, equity, or similar account.
Partnership accounting is the same as accounting for a proprietorship except there are separate capital and drawing accounts for each partner. The fundamental accounting equation (Assets = Liabilities + Owners Equity) remains unchanged except that total owners equity is the sum of the partners capital accounts.

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