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+--- Thread: queries regarding partnership accounting (/thread-queries-regarding-partnership-accounting)
queries regarding partnership accounting - insaan - 05-28-2006
1. In the absence of any agreement, shares given as Purchase consideration are distributed among partners in
Capital sharing ratio OR profit and loss sharing ratioâ¦
2. Where partnership is converted to Ltd company and cash and bank is not taken over by the new company, is it necessary that the cash A/C shall show a nil balance at the end after appropriate distribution to partners. Can there be a case where the cash A/C doesnât show a nil balance???
- insaan - 05-28-2006
oh i hav found the answer to my 1st question
partnership act in the absence of any agreement doesnt allow the distribution of shares in profit sharing ratio .
BUT now what the matter is that some authors distribute the shares in closing partners capital ratio as at balance sheet date , whereas some
distribute in the ratio of partner's final claims that is after loss or profit on realisation & other reserves and profits have been transferred.which one should be preferred and why?