3 Questions
Which type of account is used to record the share of profits or losses by the partner in a partnership firm?
Current account
What is the primary purpose of preparing a partnership account?
To distribute profits among partners
In partnership accounting, what does the term 'guarantee against loss' refer to?
A partner's assurance of covering any losses incurred by the firm
Study Notes
Partnership Accounts
- A Current Account is used to record the share of profits or losses by the partner in a partnership firm.
Purpose of Partnership Account
- The primary purpose of preparing a partnership account is to ascertain the profit sharing ratio among partners and to determine the balance of capital accounts.
Guarantee Against Loss
- In partnership accounting, the term 'guarantee against loss' refers to a partner's promise to compensate the other partners for any loss that may occur due to their actions or decisions.
Test your knowledge of partnership accounts with this quiz for class 12th students. Explore concepts such as recording profits and losses, the primary purpose of partnership accounts, and understanding the term 'guarantee against loss' in partnership accounting.
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