Accounting (AS)·Partnerships · NSSCAS 2.2.1
Partnerships: the agreement & income statement
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Two people, one business, one pot of profit — how do they keep it fair? In this lesson you learn what a partnership agreement states, the default rules that apply when there is no deed, and how to prepare a partnership's income statement, including interest on a partner's loan. This is a Paper 1 favourite: examiners love a 'no deed' explanation followed by a full income statement to prepare.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Accounting (AS) 2.2.1):
- explain the features of a partnership agreement
- explain the position of the partnership when there is no partnership deed
- prepare the income statement of a partnership including the adjustments as detailed in Theme 2, Unit 2.1 to calculate the profit or loss for the year
- show the accounting records for a partner's interest on loan
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