CXC CSEC Principles of Accounts (POA) exam guide: Section 9: Accounting for Partnerships
CXC CSEC Principles of Accounts Exam Guide
Section 9: ACCOUNTING FOR PARTNERSHIPS
The students should be able to:
|1.||Define a partnership business;||
Definition of partnership;
Comparison of a partnership with
types of partners.
|2.||State the features of a partnership;||
Features of partnership –
|3.||Give reasons for establishing partnerships;
Reasons for formation of partnership, for example,
|4.||Outline the essential components of a partnership agreement;
Features of partnership agreement, including
interest on capital and drawings,
Prepare journal entries and ledger accounts to record the capital of partnerships;
The capital account of partners –
cash and non-cash resources;
types of capital account – fixed and fluctuation capital accounts and their implications.
|6.||Use various methods to share profit/loss among partners;||
Methods of sharing profit/loss:
|7.||Prepare appropriation account of partnerships;||
The preparation of the appropriation account.
|8.||Prepare current account of partners;||
The current account prepared with items from the appropriation account; columnar form and single accounts.
|9.||Explain the significance of the brought down balances on partners’ current accounts;||
The significance of the debit and credit balances brought down on the current accounts.
|10.||Prepare balance sheet of partnerships;||
The treatment of current account balances on the balance sheet; (emphasis on capital section).
|11.||Analyze performance and position using ratios.||
The calculation and interpretation of accounting ratios.
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