• Section – 4“Partnership is the relation between persons

who have agreed to share the profit of the business carried on by all or any of them acting for all".

Characteristics of Partnership

Association of Persons

Agreement

Profit sharing

Management

Partnership Deed

• Agreement between partners in oral or writing is known as Partnership Deed. It helps in resolving future disputes.

Kinds of Partners • Active partner • Sleeping Partner

• Nominal Partner • Partner in Profits

Kinds of Partnership• Partnership at Will • Particular Partner

Final Accounts1. Capital Accounts2. Profit & Loss Appropriation Account• Interest on Capital• Interest on Drawings• Salaries to Partners• Distribution of Partners3. Guarantee of Profit to a partner

Interest on Capitali. Interest on Capital A/c Dr. To Partner’s A/c (individually)ii. Profit & Loss Appropriation A/c Dr. To Interest on Capital “OR” iii. Profit & Loss Appropriation A/c Dr. To Partner’s Capital A/c

Interest on Drawingsi. Partner’s Capital A/c (individually) Dr. To Interest on Drawings A/cii. Interest on Drawings A/c Dr. To Profit & Loss Appropriation A/c “OR”iii. Partner’s capital A/c (individually) To Profit & Loss Appropriation A/c

Salaries to Partnersi. Salaries to Partners A/c Dr. To Partner’s Capital A/c (individually)ii. Profit & Loss Appropriation A/c To Salaries to Partner A/c “OR”iii. Profit & Loss Appropriation A/c To Partners Capital A/c