0Business can be organised in the form of a sole proprietorship, a partnership firm or a company. Earlier, you have studied how to prepare Profit and Loss Account and Balance Sheet of a sole proprietor. If one man was intelligent enough and commanded all the resources that he needed and also the necessary power to do everything, he would have carried on his business as an individual. Alas, this is not true in life. Every man needs help from others and this is true in business which requires huge resources for the ongoing expansion programmes. Therefore, one of the inevitable ways is to form partnership by joining hands with person(s) who can complement the efforts by bringing in the necessary intellectual as well as financial capital. This chapter is devoted to the basic aspects of partnership accounting dealing with the
