and here's some info abt poa partnership!!

Theory questions of Final Accounts:
a) Advantages & Disadvantages of partnership:
Advantages - 1: A bigger pool of capital is available for business opportunities.
2: Combined skilled and expenses of partners for more effective business management.
3: Sharing of business tasks or duties between partners.
Disadvantages - 1: Unlimited liability of a partner. That is , when the partnership is unable to pay its debts , the partners can be forced to pay partnership debts with their personal assets.
2: Mutual agency. That is , every partner is considered an ;authorized representative’ to bind the partnership to contracts within the normal operations of the business. Hence , all partners are held responsible for contractual losses of the business incurred by any single partner.
b) Why partnership agreement.
A Partnership Agreement is usually drawn up to avoid any misunderstandings or disputes in the future.
c) If no partnership agreement , how to share profits available?
All disputes will be settled by referring to the Partnership Act. This statute (law) states that :
- Profit and losses are to be divided equally among all partners.
- Partners who lent money to the firm (Loans from partners) will be entitled to an interest of 5% per annum.
- No interest on capital will be paid for capital contributed.
- No interest on drawings will be charged on drawings.
- No salaries will be paid to any partners for acting in the management of the firm.
d) Compare and contrast sole trader and partnership
Features
Partnership
Sole Proprietorship
1
Number of owners
More than one but not more than 20
(However , for a bank, the maximum number is 10)
One
2
Profits/Losses
Partners share profits and losses.
Owner takes all profits and bears all losses
3
Resources
Funds , skills and knowledge are pooled.
Contributes all resources needed.

e) Advantages of current account
To maintain the actual capital contribution of each partner in the Capital Account , his share of profits and his drawings are recorded in a separate Current account. Thus , the Capital Account is fixed , and its balance is not affected by entries which are not contribution to capital by the partner in the form of cash or non-cash assets.
- Capital account will remain fixed.
- Partner’s benefits are shown in details ; only the final balances are disclosed in the balance sheet.
f) Debit balance in Current account means what?
This indicates the amount he owes the firm , having drawn out more than his share of profits.
g) Explain how each of the following are dealt with in the final accounts of a partnership:
- an employee’s salary ; dealt in the accounts as expense in the Profit and loss account.
- a partner’s salary ; dealt in the accounts as distribution of profit in partnership appropriation account.

copyright @ eurica!

i think it;s too late hor :(

sf