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 Liabilities of a Partner
Liabilities Of A Partner
When a partnership is formed certain terms governing his relationship with the firm are also decided a prior that makes him liable in the following cases:
Competitive Business by a Partner: In case a partner carries a business that is quite similar to that of the firm and earns profits from it, then he shall be liable to pay such profits to the firm. The reason is that his business being a competition for the firm violates the very basic nature of trust bestowed on him by the firm.
Profit for self from a firm’s transaction: If a partner earns any profit for self through the use of business’s property or connection or through any business transaction then the profit so earned shall be handed over to the firm as it is. The reason is that a partner must not take undue advantage of the firm for his own personal gains. For example, rent from a business property belonging to the firm must not be taken by the partner, etc.
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.