Advanced Accounting Problems, With Explanatory Notes (Classic Reprint)

While the accounting problemfe peculiar to partnerships offer no principles that are essentially new, yet in no branch of accounting does the application of those principles require any more complete knowledge of all details and more accurate and logical reasoning in order to arrive at equitable results. In fact, partnership adjustments and liquidations as a rule require more of the mathematical ability to do abstract reasoning than a technical training in accounting. In other words, most partnership problems would be easily possible of solution if one did not understand even the meaning of debit and credit. A knowledge of the general principles of partnership law is essential to the proper handling of problems arising from partnership affairs. Partnerships are the oldest form of association for business purposes and as they are organized under the common law, no statutory requirements must be complied with as is the ease in organizinga corporation. As these agreements are often made orally and by implication, there is no written record of the understanding between the partners as to how the affairs are to be administered or as to the respective interests of the partners in the business. Even when the agreement is in writing, the terms thereof are often vaguely and incompletely expressed, leaving certain essential things to be implied or to be settled by the courts. These circumstances have given rise to numerous legal decisions pertaining to partnership affairs which form the basis of settlement in all disputed cases. An -attempt will be made in these notes to discuss the general principles underlying partnership accounts as deduced from law and practice and to illustrate these principles by concrete cases. Division of Profits In the absence of any agreement between the partners as to how profits shall be shared, the law will give each partner an equal shar
(Typographical errors above are due to OCR software and don't occur in the book.)