Acc 407 Advanced Accounting
Accounting for Partnerships
In the business world, there are different types of businesses can be classified into various forms of ownership. Some of those forms are a corporation, sole proprietorship, and a partnership. The form I will be discussing in this paper is called a partnership. A partnership is when two or more people own and operate in a business which also takes part of the responsibility. Our text says that “Partnerships are a popular form of business because they are easy to form and they allow several individuals to combine their talents and skills in a particular business venture” (Baker, Christenson, & Cottrell, 2011, p. 750). Partnerships have many different types of ownership which are limited partnerships (LP), limited liability partnerships (LLP), and limited liability limited partnerships (LLLP). Each one is characterized by how much liability each partner has within the company. There are many advantages of owning and running a partnership but there are also disadvantages, as well. Understanding each advantages and disadvantages will help the company to create and operate more effectively. The Financial Accounting Standards (FAS) govern accounting for partnerships when establishing which included creation, operation, and liquidation. When a partnership has been established, there are certain tax consequences a partnership may have. Tax consequences show what each partner has contributed to the business. Partnerships is not only a noble way to run a business but the individuals involved in the partnership are aware of each aspect and responsibility the partnership has which will assistance the company in developing into a successful business.
A partnership is the relationship existing between two or more people who join together and operate a business that takes part in the responsibility of the business. Each person in the partnership contributes money, time, skills, and/or property and expects to split the profits and losses of the
In the business world, there are different types of businesses can be classified into various forms of ownership. Some of those forms are a corporation, sole proprietorship, and a partnership. The form I will be discussing in this paper is called a partnership. A partnership is when two or more people own and operate in a business which also takes part of the responsibility. Our text says that “Partnerships are a popular form of business because they are easy to form and they allow several individuals to combine their talents and skills in a particular business venture” (Baker, Christenson, & Cottrell, 2011, p. 750). Partnerships have many different types of ownership which are limited partnerships (LP), limited liability partnerships (LLP), and limited liability limited partnerships (LLLP). Each one is characterized by how much liability each partner has within the company. There are many advantages of owning and running a partnership but there are also disadvantages, as well. Understanding each advantages and disadvantages will help the company to create and operate more effectively. The Financial Accounting Standards (FAS) govern accounting for partnerships when establishing which included creation, operation, and liquidation. When a partnership has been established, there are certain tax consequences a partnership may have. Tax consequences show what each partner has contributed to the business. Partnerships is not only a noble way to run a business but the individuals involved in the partnership are aware of each aspect and responsibility the partnership has which will assistance the company in developing into a successful business.
A partnership is the relationship existing between two or more people who join together and operate a business that takes part in the responsibility of the business. Each person in the partnership contributes money, time, skills, and/or property and expects to split the profits and losses of the
References: Baker, R. E., Christenson, T., & Cottrell, D. (2011). Advanced Financial Accounting, 9th ed. New York: The McGraw-Hill Companies. ISBN: 9780078110924. Beers, J. (1981, June). Starting a New Business: Evaluating the Tax Consequences of the Four Entity Choices. Taxation for Accountants. Retrieved April 20, 2013, from ProQuest: http://search.proquest.com.proxy-library.ashford.edu/accounting/docview/198441890/13D8E3BAC9D38097B3A/39?accountid=32521 Cooper, P. A. (1993). Partnerships: The key ingredients. Dental Economics. Retrieved April 17, 2013, from ProQuest: http://search.proquest.com.proxy-library.ashford.edu/accounting/docview/209805969/13D7F07B5AC4E6A5E8F/20?accountid=32521 General Partnership Advantages and Disadvantages. (n.d.). Retrieved April 20, 2013, from residual-rewards: http://www.residual-rewards.com/general-partnership.html Guerrero, P., & J, P. (1998). Partnership Liquidation. Retrieved April 20, 2013, from http://www.oocities.org/upgroup01/liquidation.html