How is accounting for a partnership similar too accounting for a corporation? What are some significant differences in accounting for partnerships as compared to accounting for corporations?
SIMILARITIES BETWEEN ACCOUNTING FOR PARTNERSHIP FIRM AND ACCOUNTING FOR CORPORATION
There are some similarities in the way accounting for corporations and accounting for partnership firms are done which include accounting for expenses like payment for wages, operation expenses etc. A company as well as a firm both have to maintain their principal books of accounts which mainly are cash book, journal, ledger of various parties including debtors and creditors and also significant transactions of their day to day activities.
SIGNIFICANT DIFFERENCES IN ACCOUNTING FOR PARTNERSHIPS AS COMPARED TO ACCOUNTING FOR CORPORATIONS OR COMPANY
The answer lies in the differences between a partnership and a company. A partnership is made up of partners, usually from 2 up to 20 people. A company on the other hand can have an unlimited number of owners called shareholders. In accounting, partnership accounts are prepared in such a way as to show the capital balances of every partner individually (which consists of their initial capital investment, their own share of the profits etc). Company accounts are not prepared this way. Instead of showing the capital balances of every partner, the “capital” is shown as share capital and reserves. Under share capital and reserves we find the shares issued to the shareholders and their nominal value, as well as other reserves ( where things like accumulated profits for the company go). When a share of these profits or reserves are distributed to the shareholders, they are known as dividends. Another point to note is that companies are usually run by agents called directors on behalf of the shareholders. Overall, company accounts are not as individualistic as partnership accounts
How is accounting for a partnership similar too accounting for a corporation? What are some significant...
1) In a set of partnership accounting records, the account for each partner named “withdrawals” is most similar to which of the following accounts found on a corporation's records? A) Long term liabilities B) Dividends payable C) Accumulated depreciation D Dividends declared E) Additional paid in capital 2. Over the years, a number of different types of organizations have been developed to take advantage of benefits of partnerships and corporations at once including: A) multi-national corporations using IFRS accounting standards....
What are the differences between the financial and managerial accounting? Discuss. Financial accounting is a language used for communicating financial information that helps users make better economic decision. Discuss. What is meant by the accrual basis of accounting? Discuss. What are the differences between sole proprietorship, partnership, and corporations? Financial accounting information should have some characteristics in order to enhance the decision making. Discuss. Discuss how the choice of depreciation method can be used as a tool to increase reported...
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What are some similarities and differences between how income is calculated for C corporations and S corporations? Please comment on both C corporations and S corporations.
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What are the benefits of the corporation in comparison with the partnership and proprietorship structures? How is equity treated and reported differently in this structure?
What are the benefits of the corporation in comparison with the partnership and proprietorship structures? How is equity treated and reported differently in this structure?
what are some differences in the cash flow statement between proprietary fund accounting and business accounting?
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The blood vessels, the arteries and veins of the body have some significant morphological differences. What are some of the most important and why do they exist?