Cheat sheet · Class 12 · CBSE · Commerce Accountancy
Accounting for Partnership Firms – Fundamentals cheat sheet
The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.
CBSE Class 12 · Accountancy
Cheat sheet
Chapter 1Accounting for Partnership Firms: Fundamentals
No deed? Equal profits, no interest on capital, no salary, 6% interest on partner's loan.
1. Partnership Basics
- Indian Partnership Act 1932; 2 to 50 partners.
- Partnership deed sets ratio, interest, salary, etc.
| Item (no deed) | Rule |
|---|---|
| Profit sharing | equally |
| Interest on capital | not allowed |
| Interest on drawings | not charged |
| Salary / commission | not allowed |
| Interest on partner's loan | 6% p.a. |
2. Capital Accounts
Fixed capital
two accounts: capital (fixed) + current (drawings, interest, salary, profit share).
Fluctuating capital
one account; all adjustments go into it.
3. Interest on Drawings
| When drawn (equal amounts) | Average period |
|---|---|
| Beginning of each month | 6.5 months |
| Middle of each month | 6 months |
| End of each month | 5.5 months |
| Beginning of each quarter | 7.5 months |
| End of each quarter | 4.5 months |
Use the product method for unequal amounts or dates.
4. P&L Appropriation
Distributes net profit: interest on capital, salary, commission (debit); interest on drawings (credit); balance shared in ratio.
Guarantee of minimum profit: deficiency borne by the guaranteeing partner(s).
5. Key Points
- Past adjustments: one corrective entry through capital/current accounts.
- Interest on capital is an appropriation, not a charge.
- Partner's loan interest is a charge against profit.
- Commission on profit after charging it: rate/(100 + rate).
Remember: Rules without deed | fixed vs fluctuating | average periods | appropriation
Accounting for Partnership Firms – Fundamentals: questions and notes
More Class 12 · CBSE · Commerce Accountancy cheat sheets
- Accounting for Partnership Firms – Fundamentals
- Reconstitution of a Partnership Firm – Admission of a Partner
- Reconstitution of a Partnership Firm – Retirement/Death of a Partner
- Dissolution of Partnership Firm
- Accounting for Share Capital
- Issue and Redemption of Debentures
- Financial Statements of a Company
- Analysis of Financial Statements
- Accounting Ratios
- Cash Flow Statement
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