Treatment of cash sent to consignor in final accounts
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When two or more individuals engage in enterprise as co-owners, the organization is known as a partnership. This form of organization is popular among personal service enterprises, as well as in the legal and public accounting professions. The important features of and accounting procedures for partnerships are discussed and illustrated below.
Accounting for initial investmentsEdit
Because ownership rights in a partnership are divided among two or more partners, separate capital and drawing accounts are maintained for each partner.
Investment of cashEdit
If a partner invested cash in a partnership, the Cash account of the partnership is debited, and the partner's capital account is credited for the invested amount.
Accounting for initial investmentsEdit
Because ownership rights in a partnership are divided among two or more partners, separate capital and drawing accounts are maintained for each partner.
Investment of cashEdit
If a partner invested cash in a partnership, the Cash account of the partnership is debited, and the partner's capital account is credited for the invested amount.
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