Accounting for a partnership is similar to accounting for a sole trader, except that:
A) tax must be calculated by the partnership on each partner's share of profit.
B) each partner's share of equity must be recorded separately.
C) two income statements must be prepared.
D) each partner has limited liability.

Question

Quizplus · Accepted Answer

In a partnership, each partner's share of equity is recorded separately in the accounting records to reflect their individual investment and share of profits or losses. This is a key difference from a sole trader, where there is only one owner's equity account.

Accounting for a Partnership Is Similar to Accounting for a Sole