Partnership
The accounting for a partnership is essentially the same as is used for a sole proprietorship, except that there are more owners. In essence, a separate account tracks each partner's investment, distributions, and share of gains and losses.
Profit and loss account of Partnership
In partnership, they have to share the profit. Also not like sole trader, there are "interst on drawings", "partners salaris" and "interest on capital".
Partner's loans
Sometimes a partner may make a loan to the partnership, this is not capital because they want the money back. Therefore it is recorded as a business liability. The partner will also expect to be rewarded interet on the loan. Interest is an expense and should be recorded on the income statement.
Interest on a partner's loan should be credited to the partner's current account because it increases the amount that the business owes the partner.
Balance sheet of Partnership
