At the end of the lesson the students should be able to
1. define a partnership business
2. state the features of a partnership
3. give reasons for establishing partnerships
4. outline the essential components of a partnership agreement
5. record partnership capital in the different types in the fixed and fluctuating capital accounts
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Prior Knowledge
Before we begin our lesson let us recap the different forms of business and the difference between each type of business.
Introduction
We will begin our lesson with a review of the different types of business structures.
Procedural Development
The focus this lesson is the partnership structure of business.
In the comments section below, write in your own words a definition of partnership. Respond to one of the post made by the group and indicate if you agree with their definition and state one reason for your answer.
Visit the website http://wizznotes.com/accounts/introduction/the-accounting-equation/partnership and compare your definition of partnership with the one provided.
Was there a difference between your definition and the one provided?
In the video below note the feature/characteristics of a partnership business.
ACRA, (2011), Types and Features of Business Entities, Available at https://www.youtube.com/watch?v=S51EQS9ykqQ, (accessed 23/3/2015).
In the comments section below compared to sole trader business state one advantage and one disadvantage of a partnership business. Type not to state the same response as other members of your group.
Before a partnership business can begin operating the partners must decide on the agreement under which they will operate.
https://www.youtube.com/watch?v=x09DaDHyqpQ
What a some of the essential components of a partnership agreement?
Spend some time examining each component of the partnership agreement. Ensure that you understand each component and how it impacts on the final accounts of the business.
Absence of a partnership agreement
If there is no partnership agreement there would be
- no salary to partners
- no interest on capital
- profits and losses are shared equally
- no interest on drawings
- if a partner puts more money into the business above the agreed capital, the partner is entitle to interest at the rate of x% per annum on the excess.
Let us now examine how partnership business raise their capital.
Discussion
What is the difference between a fixed capital and a fluctuating capital account?
Assessment
Working in groups look at the worksheet and prepare a solution to the questions.
worksheet
Topic Summary
When two or more individuals come together
to do business a partnership is formed.
Each partner is required to make contribution the business’
capital. A partner can have limited or
unlimited liability but at least one partners should have unlimited liability.
I think that a partnership is when two or more persons come together and work to accomplish a particular goal
ReplyDeleteDenzel i agree because in a partnership they most be more than 1 persons who are following a particulat goal because everyone is one the same objective
DeleteA partnership is the partnering of persons who share the same objective in a busness
ReplyDeleteAlisha
I disagree with the fact the user used 'partnering'
DeleteAn partnership is the arrangement where parties, agree to cooperate and share different skill and idea among the business. #Joel
ReplyDeleteA partnership is a business in which more than one person's can be call the owners of that business. Shemar
ReplyDeleteA partnership is not a business and just to call the owners.
DeleteIts where 2 or more person operating a business just to reach its goal or making a profit in the
business
Lamoy
ReplyDeleteWhat is a Partnership?
Partnership refers to an agreement between two or more person operating a business in oder to complete a task or goal.
I think that a partnership is when two or more persons come together and work to accomplish a particular goal
ReplyDeleteI think that a partnership is when two or more persons come together and work to accomplish a particular goal
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