Palgrave Macmillan: Companion website for Collis - Business Accounting: Chapter 9

A general partnership:
1. is limited to a maximum of 10 partners
2. must keep accounting records of transactions
3. is governed by the Partnership Act 1890
4. is governed by the Companies Act 1985
In the absence of any other agreement, the law states that:
1. partners are entitled to a salary
2. losses and profits are shared equally
3. partners must lend equal amounts to the business
4. interest must be charged on drawings
Salaries paid to partners are shown as:
1. an expense in the profit and loss account
2. a deduction in the appropriation section of the profit and loss account
3. an addition in the appropriation section of the profit and loss account
4. a liability in the balance sheet
Normally a balance sheet for a partnership shows:
1. the capital accounts only
2. the current accounts only
3. the capital accounts and the current accounts
4. neither the capital accounts nor the current accounts
Partners can only receive a salary if:
1. they have not contributed any capital
2. the business has made a profit
3. they work full-time in the business
4. the partnership agreement states they can
Legal rules state that if a partner’s capital account shows a deficit on dissolution of the partnership:
1. the deficit is shared equally between the other partners
2. the deficit is shared between the other partners in their profit-sharing ratios
3. the deficit is shared between the other partners in their capital-balance ratios
4. the partnership cannot be dissolved

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