Download Class 12 commerce accountancy subject all chapters notes by CBSE Toppers Students. It will and more Study notes Business in PDF only on Docsity! Chapter 1 notes By Topper Students The first chapter of Class 12 Accountancy is "Accounting for Partnership Firms - Fundamentals". This chapter covers the basics of partnership firms, including the definition, features, and types of partnership. Definition of Partnership: A partnership is a form of business organization where two or more persons come together to carry out a business activity with a view to earning profit. The partners share the profit or loss of the business in a pre-agreed ratio. Features of Partnership: The features of partnership include: Agreement: A partnership is based on a partnership deed or agreement that outlines the terms and conditions of the partnership. Number of Partners: A partnership must have at least two partners and can have a maximum of 20 partners in a regular business and 50 in a banking business. Liability: The liability of partners is unlimited. This means that the partners are personally liable for the debts and obligations of the partnership. Profit Sharing: The profits of the partnership are shared among the partners in a pre-agreed ratio. Management: The partners manage the business jointly, unless specified otherwise in the partnership agreement. Duration: A partnership can be formed for a specific period or for an indefinite period, as specified in the partnership agreement. Types of Partnership: There are two types of partnership, namely: General Partnership: In a general partnership, all partners share the profit and loss of the business in a pre-agreed ratio. They also have unlimited liability. Limited Partnership: In a limited partnership, there are two types of partners - general partners and limited partners. The general partners manage the business and have unlimited liability, while the limited partners contribute capital but do not participate in the management of the business and have limited liability. Partnership Deed: A partnership deed is a legal document that outlines the terms and conditions of the partnership, including the name of the partnership, the capital contributed by each partner, the profit-sharing ratio, the duties and responsibilities of each partner, the rules for admission and retirement of partners, etc. In conclusion, this chapter provides an introduction to the concept of partnership firms, their features, and the types of partnerships. It also covers the importance of a partnership deed and its contents. The understanding of these fundamentals is essential for the students to grasp the subsequent chapters on partnership accounting.
