DEPARTMENT OF TECHNICAL EDUCATION

GOVERNMENT OF ANDHRA PRADESH

Name :N SAI RAM
Designation :HEAD OF CCP SECTION
Branch : Commercial and computer practice
Institute : Govt polytechnic for women
Kakinada
Semester :IV
Subject :ACCOUNTANCY - III
Subject Code :CCP-402
Topic :Partnership Accounts
Sub topic :PARTNERSHIP DEED
Duration :50 Minutes
Teaching aids : PPT, Animation

CCp402.32 1
Partnership Admission
Objectives

On Completion of this period, you would

be able to Know:

 Meaning and contents of Partnership Deed

 Maintenance of Capital Accounts

CCp402.32 2
Recap

In the Previous class we have already learnt:

 The need for Partnership

 Definition
 Essential Features
 Kinds of Partner
 Partnership Agreement

CCp402.32 3
Partnership Deed

 Written agreement Is Called ‘Deed’

 It Is a Document
 It Contains List of Terms and Conditions
 All Clauses And Provisions of business find a
Place In Deed

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Contents of a Partnership Deed

The following are some of the important

Contents of a Partnership Deed:

4. Name and Address of the Firm

5. Name and Addresses of Partners
6. Nature of Business
7. Capital Contributions of Partners
8. Profit Sharing Ratio

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Contents of a Deed

1. Interest on Drawings
2. Salary or remuneration payable to partner, if
any
3. Commission payable to partner, if any
4. Interest on Loans provided by partners

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Contents of a Deed

1. Limitation on Drawings
2. Maintenance of Accounts
3. Procedure for Admission, Retirement and
Death
4. Procedure for Dissolution of Firm

CCp402.32 7
PROVISIONS APPLICABLE AS PER ACT
WHEN THERE IS NO AGREEMENT

1. Profit or Loss to be shared equally

2. No interest on Capital allowed
3. No interest on Drawings charged
4. No Salary and no Commission
5. Interest on loan provided by partner carries 6%
p.a.

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Maintenance Of Capital Accounts

There are two methods of maintaining capital accounts of

partners

3. Fixed capital method

 Under this method the capital account of the partner
remains fixed from one year to another year.
 The changes with regard to profits, salaries, interest,
drawings, etc. are taken to a separate account called
Current Account of the partners.
 Since the capital accounts of the partners remain
unchanged from one year to another, it is called Fixed
capital method

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2. Fluctuating Capital Method:
 Under this method all the changes with regard to profits,
interest, salaries, drawings, etc. are recorded in the
same account.
 Since the capital fluctuates from one year to another
year, on account of the above changes, the method is
called Fluctuating Capital Method

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Entitlements of a Partner
Partners are entitled to the following as per
agreement

• Salary
• Commission
• Share or profit
• Interest on capital
• Goodwill
All the above items are credited to partners’
capital accounts

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Charges of a Partner
 Partners are charged with the following as per
agreement

 Interest on Drawings

 Interest on Drawings along with Drawings will be

debited to Partners’ Capital Accounts

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Summary
In this session ,we have learnt about

 The Contents of partnership Deed

 Maintenance of Capital Accounts
 Entitlements of Partners
 Changes of Partners

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