Financial statements of a partnership
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Video Overview

The net profit figure calculated in the profit and loss account of a partnership must be shared amongst several owners. To achieve this, the net profit figure in the profit and loss account is closed off to an account called the appropriation account. Once in the appropriation account, the net profit is adjusted for appropriation income and expenses and each partner’s remaining profit or loss share is calculated according to a pre-determined ratio - with contra entries created against the partners equity accounts. In this tutorial we take a look at the financial statement of a partnership.