Major Difference Of The Financial Statement between Sole Proprietorship And Partnership

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

Sole Proprietorship

Partnership

Only one Capital Account

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

All the profit belongs to the owner

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

None

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

Balance Sheet show only one capital account which belongs to the single owner.

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

None.

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.

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Financial Accounting

 
 

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