The word ‘Partnership’ in the layman sense implies an agreement between two people to work together or jointly. In accountancy, the meaning of partnership is similar to that in the general sense but with a greater depth. In our context, partnership implies the agreement between two or more people who have decided to carry out a business jointly. The main motive to form a partnership is to earn profit arising out of the business activities. Following are the Rights of Partners of a Partnership Firm
Rights of Partners of a Partnership Firm
- Every partner has a right to share profits or losses of the firm equally or in the ratio as agreed among them.
- Every partner has a right to receive interest on loan and advances provided to the firm at the rate of 6% p.a. if the rate is not agreed among the partners.
- Every partner has a right to participate in the conduct or management of the business.
- Every partner has a right to access, inspect and copy the books of accounts and records of the firm.
- Every partner has a right to voice his/her opinion on the matters relating to the business.
- Every partner has a right to be indemnified for all the expenses and liabilities incurred by him/her on behalf of the business.
- Every partner has a right to use the property of the firm exclusively for the partnership business and not for personal use.
- A partner has a right to restrict the admission of a new partner or prevent the expulsion of existing partner from the firm.
- A partner has a right to retire from the firm after giving a proper notice or with the consent of all other co-partners.
- In case of emergency, a partner has a right to act on behalf of the firm in order to prevent it from the losses and posses a right to claim indemnity for the payments made by him/her for such act.
The balance sheet is the last financial statement that is prepared by any organization. This statement helps to ascertain the true financial position of an enterprise at the end of an accounting period
A profit and Loss Account is the second financial statement prepared by an organization. This account is prepared to ascertain the net results of a firm in form of net profit earned or net loss incurred during an accounting period.
Accounting software is an integral part of the computerized accounting system. The accounting software should be selected after considering the level of skill and proficiency of the accounting professionals.
Accounting Reports: When the collected data is processed and manipulated in a useful sense that can be understood by the users without any ambiguity, then it becomes information.
Transaction Processing System (TPS) refers to a computerized system that records, processes, validates, and stores routine transactions that occur in various functional areas of a business on daily basis.