ACCT B8008 Lecture Notes - Lecture 8: Capital Account, General Journal, Net Income
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MR/ MOHAMMED EZZAT
Dividing net income & net loss:--
@@ partners equally share partnership net income or net loss unless the partnership contract indicates otherwise.
(income ratio & loss ratio) (profit & loss ratio) …
@@ the partnership recognize a partner's share of net income or net loss in the accounts through closing entries ...
@@ partnership must make four entries in preparing closing entries :- the entries as follows@@
1- To close the revenue of partnership:-
Debit each revenue account for its balance & credit income summary (total revenue)..
2- To close the expense of partnership:-
Debit income summary for total expenses & credit each expense account for its balance..
3- to close capital account for each partners:-
there are two cases:- A- Net income (profit).. B- Net loss..
A- in case of net income:
debit income summary for its balance & credit each partner's capital account for his share of net income…