Major Difference Of The Financial Statement between Partnership And Limited Company

September 5th, 2006 Comments off
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Tabulated below are the major differences of the financial statement of a Partnership and Limited Company:

Partnership

Limited Company

More than one capital account. The number of capital account depends on the number of partners in the Partnership concern.

Shareholders fund which comprises many categories like share capital, retained earnings, other revenue and capital reserves.

Profit & loss is distributed to the partners’ capital account according to the agreed ratio.

Unlike a partnership which has taxation on the individual partners, a limited company is imposed tax as it is a separate legal entity

The income statement of the Partnership shows a schedule on how the net profit/loss is distributed to the partners.

Also, show a Statement of Changes in Equity where changes in share capital, profit, revenue and other capital reserves during the year.

The balance sheet shows the balance of the capital amount of each partner classified under owner’s equity.

As shareholder funds

Besides the income statement and the balance sheet, a Statement of Partner’s Equity is also prepared to show the CHANGES in equity of each partner since the beginning of the year.

Statement of Changes in Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

{ Click here to go to Content Page on The Different Types of Organizations, Partnership Accounts }

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Financial Accounting

 
 

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