Preparation of balance sheet of partnerships

Section 8Objective 9

Prepare balance sheet of partnerships

• The balance sheet of a partnership similar to that of a sole trading company except for the following:– Capital accounts for each partner is listed

separately– Current accounts of the partners are listed

separately in special sections for example• Current accounts with credit balances are listed as

current liabilities• Current accounts with debit balance are listed as

current assets

Prepare balance sheet of partnerships

• There are two ways of setting out the capital section showing:– Detailed capital section – shows the capital

account balances at the year end and all of the detailed information are recorded in each partner’s current account

– Summarised capital section –will show the final balances on each partner’s capital and current account

Format of a detailed capital section

Sample of a summarised capital section for a partnership company