Posted: May 3rd, 2016

What is a partnership?

In comparison to the owners’ equity section of a corporation’s balance sheet, owners’ equity of a proprietorship or partnership:
a) normally does not make a distinction between invested capital and retained earnings
b) normally uses “Capital” accounts for each individual owner, rather tha a “Retained Earnings” account for all of the owners.
c) normally uses a “Drawings” account for each individual owner, rather than a “Dividends” account for all the owners.
d) all of the aboveGovernmental financial statements are significantly different from those produced in accordance with GAAP. One significant reason for the difference is the financial statement user. Describe the governmental financial statement user and their needs.