Partnership accounting:
A) Is the same as accounting for a sole proprietorship.
B) Is the same as accounting for a corporation.
C) Is the same as accounting for a sole proprietorship, except that separate capital and withdrawal accounts are kept for each partner.
D) Is the same as accounting for an S corporation.
E) Is the same as accounting for a corporation, except that retained earnings is used to keep track of partners' withdrawals.

Question

Quizplus · Accepted Answer

Partnership accounting is similar to accounting for a sole proprietorship, except that separate capital and withdrawal accounts are kept for each partner. This allows for the tracking of each partner's investment and withdrawals from the partnership. Corporations and S corporations have different structures and accounting systems, so options B and D are incorrect. Option E is also incorrect, as retained earnings in corporations are not used for tracking partner withdrawals.

Partnership Accounting