Grade 11 Accounting
Luthando Zulu – Teach Me 2
Accounting for A Partnership:
• Comprises of an entity with 2-20 partners
• Formation is through a founding document referred to as a partnership agreement.
• Agreement can be done in orally, in writing or tacitly (assumed into)
• The introduction of a new partner provides a new avenue of owner’s equity
• All risk (liabilities and losses) and rewards (profits) are shared in the partnership. In legal terms, it is said that the partners are
dually and severally liable
• The partners earn the following forms of income via the partnership:
Interest on capital
Return on
Provider of Capital
Investment
Final Profit share
Partner
Salary to partner
Work done in Return on
Partnership investment
Bonus to partner
Primary distribution Secondary/Final distribution
o Interest on capital o Share of final net profit/loss
o Salary to partner
o Bonus to partner
1
, The main ledger accounts of a partnership operate in the following manner under DEAD CLIC:
Current Account: Name of Partner (Owner’s Equity)
Balance b/d (Unfavourable) Balance b/d (Favourable)
ANYTHING TAKEN/WITHDRAWN FROM ANYTHING EARNED IN THE
THE PARTNERSHIP PARTNERSHIP
• Drawings made by partner • Salary to Partner
• Share of final loss • Interest on capital
• Bonus to partner
• Share of final profit
Capital: Name of Partner (Owner’s Equity)
Balance b/d (Unfavourable) Balance b/d (Favourable)
• Bank (Capital withdrawals) • Bank (Capital contributions)
• Vehicles
• Trading stock
• Consumable stores
2
Luthando Zulu – Teach Me 2
Accounting for A Partnership:
• Comprises of an entity with 2-20 partners
• Formation is through a founding document referred to as a partnership agreement.
• Agreement can be done in orally, in writing or tacitly (assumed into)
• The introduction of a new partner provides a new avenue of owner’s equity
• All risk (liabilities and losses) and rewards (profits) are shared in the partnership. In legal terms, it is said that the partners are
dually and severally liable
• The partners earn the following forms of income via the partnership:
Interest on capital
Return on
Provider of Capital
Investment
Final Profit share
Partner
Salary to partner
Work done in Return on
Partnership investment
Bonus to partner
Primary distribution Secondary/Final distribution
o Interest on capital o Share of final net profit/loss
o Salary to partner
o Bonus to partner
1
, The main ledger accounts of a partnership operate in the following manner under DEAD CLIC:
Current Account: Name of Partner (Owner’s Equity)
Balance b/d (Unfavourable) Balance b/d (Favourable)
ANYTHING TAKEN/WITHDRAWN FROM ANYTHING EARNED IN THE
THE PARTNERSHIP PARTNERSHIP
• Drawings made by partner • Salary to Partner
• Share of final loss • Interest on capital
• Bonus to partner
• Share of final profit
Capital: Name of Partner (Owner’s Equity)
Balance b/d (Unfavourable) Balance b/d (Favourable)
• Bank (Capital withdrawals) • Bank (Capital contributions)
• Vehicles
• Trading stock
• Consumable stores
2
