PARTNERSHIP

OPERATION AND
DIVISION OF PROFIT AND
LOSS

PARTNERSHIP
OPERATION
Income Summary
COS

BASIS OF PROFIT AND

LOSS DIVISION

METHOD OF DIVIDING
PROFIT OR LOSS

Net Sales

- mutual agreement

Expenses

IF PROFIT:
Income Summary
A, Drawings
B, Drawings

IF LOSS:
A, Drawings
B, Drawings
Income Summary

CHANGE IN PROFIT
AND LOSS
AGREEEMENT

LEGAL
PROVISIONS
- partnership
must conform to
these provisions

PARTNERS'
AGREEMENTS /
ARTICLES OF CO PARTNERSHIP

Arbitrary or any
agreed ratio
Capital ratio

Interest on
investment,
remaining profit
to be divided in
an agreed ratio

Salaries to partners,
balance to be
divided in an
agreed ratio
Combination of
salaries, interest
and balance to be
divided in an
agreed ratio
Bonus to partner,
balance to be
divided in an
agreed ratio

- care must be
exercised to assure
that no errors were
committed