A partnership firm have a building given as rent

a partnership firm have a building given on rent to partner and partner gives rent does the partner has to pay the rent in cash/bank or adjust from his capitals a/c??
Replies (3)
Quick Summary
This discussion explores how a partnership firm should handle rent payments made to a partner who owns the building. The consensus is that rent should be paid via cash or bank transfer, rather than being adjusted directly from the partner's capital account. Rent is considered a business expense and is reflected in the income statement, while partner-specific items are handled in the appropriation account.

Rent should be paid through cash/bank
Why we doesn't adjust it form capital account ??

Page 79 2-Ch. (Partnership Firm-Basic Concepts (Ver.-5).pmd (ncert.nic.in)

After deducting al the expenses, the net income goes to appropriation account where partners expenses are detailed. page 74 2-Ch. (Partnership Firm-Basic Concepts (Ver.-5).pmd (ncert.nic.in)

Rent is related to company and hence shown in income statement. Anything related partners, it is shown in appropriation account. 

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register