Partnership Account: Terminologies Used - SS2 Accounting Past Questions and Answers - page 1
What is capital in a partnership account?
The amount of money or assets that each partner has invested in the partnership
The profits earned by the partnership
The expenses incurred by the partnership
The amount of money owed by the partnership to creditors
What is goodwill in a partnership account?
The value of the partnership's reputation and customer base
The amount of money paid by the partnership to each partner for the use of their invested capital
The portion of profits that is set aside for future business needs or as a contingency fund
The legal document that outlines the terms and conditions of the partnership
What is interest on capital in a partnership account?
The amount of money paid by the partnership to each partner for the use of their invested capital
The amount of money owed by the partnership to creditors
The portion of profits that is set aside for future business needs or as a contingency fund
The allocation of profits among partners based on their ownership percentage
What is a partner's current account in a partnership account?
The record of transactions of each partner with the partnership
The legal document that outlines the terms and conditions of the partnership
The value of the partnership's reputation and customer base
The allocation of profits among partners based on their ownership percentage
What are reserves in a partnership account?
The portion of profits that is set aside for future business needs or as a contingency fund
The amount of money paid by the partnership to each partner for the use of their invested capital
The value of the partnership's reputation and customer base
The allocation of profits among partners based on their ownership percentage
What is the partnership agreement in a partnership account?
The partnership agreement is the legal document that outlines the terms and conditions of the partnership, including the sharing of profits and losses and the roles and responsibilities of each partner.
What is dissolution in a partnership account?
Dissolution is the termination of the partnership, which may occur due to retirement, death, or other reasons outlined in the partnership agreement.