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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