Business Administration 2257 Study Guide - Final Guide: Fixed Asset, Negative Number, Individual Capital

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Vicki Sweeney

Document Summary

Partnership act: law in canada, defines a partnership as a business formed by two or more people in order to earn a profit. Forming a partnership: add up assets and liabilities for each partner and find the market value of their assets they are investing into business, make an entry for each partner debit: the assets the partner invests credit: The liabilities the partner brings in, partner capital. Closing entries: used to comply with matching principle and close temporary accounts to zero and update partner capitals, steps, close revenue to income summary- debit: revenue credit: income. Summary: close expenses to income summary- debit: income summary credit: Expenses: close income summary to individual capital accounts- debit: income summary credit: partner capital accounts, close individual drawings accounts to individual capital accounts- Admission of a partner: method 1: new partner purchases an interest of an existing partner, multiply the amount share given to new partner by capital balance of existing partners.