FAR Practice

It is an association of two or more persons that oversees the business and shares it's profits

• partnership
• sole proprietorship
• limited liability company
• corporation

Involves the right if each partner share in the profit, participate in the management, and hold an interest in the property.

• Partnership
• Corporation
• Sole proprietorship
• Co-Ownership

  Can be dissolved by admission, death, insolvency, withdrawal of a partner or expiration of the term of the partnership

• Mutual Contribution

• Income Taxes

• Limited Life

• Unlimited life

All partners are personally liable to the debts of the partnership

• Mutual Contribution

• Income Taxes

• Limited Life

• Unlimited Life

These are the advantages of partnership

• Limited liability, tax advantages, and increased access to capital.
• Decreased decision-making power, increased conflicts, and difficulty in terminating the partnership.
• Lack of individual control, potential for unequal contributions, and difficulty in resolving disputes.
• Shared responsibilities, shared resources, shared risks, and the ability to combine complementary skills and expertise.

This are the kind of partners that to the extent of their separate properties after all the assets of the partnership are exhausted

• General Partners

• Real Partners

• Secret Partners

• Capitalist Partners

This is a type of partners that contributes knowledge or personal service to the partnership

• Industrial Partners

• Universal Parnters

• Nominal Partners

• Limited Partners

Partner's Capital: Original Investment

• Debit

• Credit

Closing of the net debit balance of the income summary account

• Debit

• Credit

Share in partnership loss

• Debit

• Credit