AA-59 How To Record Entries From Sole Proprietorship To Partnership Account

Respected Dhirajlal Rambhia Sir,

Please give your precious comments on above query.

 In a partnership firm....... suppose X is deposited in the partnership firm, so credit to X then through journal entries debit to X & credit to Sole proprietorship firm  & vice versa debit to the partnership firm & credit to X in the books of proprietorship firm.

Originally posted by : NARENDRA
	In a partnership firm....... suppose X is deposited in the partnership firm, so credit to X then through journal entries debit to X & credit to Sole proprietorship firm  & vice versa debit to the partnership firm & credit to X in the books of proprietorship firm.

Dear Narendra Sir, 

First of all, Sorry for late response. 

I would like to thank for your reply.

Please let me know as I mentioned in my query that if we booked sale in proprietorship and increase our debtor in balance sheet but receipt against this sale deposit in partnership firm's bank account how we will record it ?

You mentioned in your reply that depositor will debit and proprietorship will credit in partnership book.

Here, my question is that which type of depositor (x) account should be make in partnership books ? Will we have to make assets account of depositor (x) ? and as far as crediting sole proprietorship account is concerned in partnership books, will we have to consider it as liability account? 

Please reply as soon as possible?

No issue if account forfeited before 31st march, even open the account as a Debtors or Creditors. But better to create X AS a debtor & to Proprietor AS a liability in the partnership's books .

Originally posted by : NARENDRA
	No issue if account forfeited before 31st march, even open the account as a Debtors or Creditors. But better to create X AS a debtor & to Proprietor AS a liability in the partnership's books .

Dear Narendra Sir,

Thanks for your another precious reply.

I want to know that is it better to create a capital account of owner of sole proprietor (who is partner in partnership now and not operating proprietorship business) in partnership books ? 

and after opening it, can we pass following entry to transfer the balances of sole proprietorship in partnership books:

Debtor 1 Dr.

Debtor 2 Dr.

Bank Dr.

Cash Dr.

Fixed Assets Dr.

Owner of sole proprietorship capital account Cr. (Here I am supposing that no current liability is exist)

By this matter all assets balances will show in partnership balance sheet and in lability side these balance will equal to capital account of proprietorship owner.

Moreover, for keeping record clear, we can follow fluctuating method in partnership and under this method, we can open a current account of proprietorship owner in partnership. 

If we earn profit or loss, it will go in current account and capital account of proprietorship can be reduced by drawing account if we want to pay received amount of debtors which transferred from proprietorship.

Please educate.

Originally posted by : My Videos
	Originally posted by : NARENDRA No issue if account forfeited before 31st march, even open the account as a Debtors or Creditors. But better to create X AS a debtor & to Proprietor AS a liability in the partnership's books . Dear Narendra Sir, Thanks for your another precious reply. I want to know that is it better to create a capital account of owner of sole proprietor (who is partner in partnership now and not operating proprietorship business) in partnership books ?  and after opening it, can we pass following entry to transfer the balances of sole proprietorship in partnership books: Debtor 1 Dr. Debtor 2 Dr. Bank Dr. Cash Dr. Fixed Assets Dr. Owner of sole proprietorship capital account Cr. (Here I am supposing that no current liability is exist) By this matter all assets balances will show in partnership balance sheet and in lability side these balance will equal to capital account of proprietorship owner. Moreover, for keeping record clear, we can follow fluctuating method in partnership and under this method, we can open a current account of proprietorship owner in partnership.  If we earn profit or loss, it will go in current account and capital account of proprietorship can be reduced by drawing account if we want to pay received amount of debtors which transferred from proprietorship. Please educate.

Kind response awaited from Narendra Sir.

Dear My Videos,

Ur Query -1

" I want to know that is it better to create a capital account of owner of sole proprietor (who is partner in partnership now and not operating proprietorship business) in partnership books ? "

Ans. : - Yes you can create a capital account in partnership books & you may be credited to it.

2

and after opening it, can we pass following entry to transfer the balances of sole proprietorship in partnership books:

Debtor 1 Dr.

Debtor 2 Dr.

Bank Dr.

Cash Dr.

Fixed Assets Dr.

Owner of sole proprietorship capital account Cr. (Here I am supposing that no current liability is exist)

Ans :- I don;t understand , what is this ?? Why should we debit to the Bank,Cash, Fixed Assets  ??? See your actual questions was that, that sole proprietor made invoices & customer deposits in partnership's account. Important thing is that when a sole proprietorship business converts into a partnership firm, what are their terms about how to carry all the debit & credit balances in partnership firms?? Do things accordingly . 

3

Moreover, for keeping record clear, we can follow fluctuating method in partnership and under this method, we can open a current account of proprietorship owner in partnership. 

If we earn profit or loss, it will go in current account and capital account of proprietorship can be reduced by drawing account if we want to pay received amount of debtors which transferred from proprietorship.

Ans: No i don't think such kind of an exercise happening in accounts, but wait for any experts answers regarding this.  

Originally posted by : NARENDRA
	Dear My Videos,   Ur Query -1 " I want to know that is it better to create a capital account of owner of sole proprietor (who is partner in partnership now and not operating proprietorship business) in partnership books ? "   Ans. : - Yes you can create a capital account in partnership books & you may be credited to it.   2   and after opening it, can we pass following entry to transfer the balances of sole proprietorship in partnership books: Debtor 1 Dr. Debtor 2 Dr. Bank Dr. Cash Dr. Fixed Assets Dr. Owner of sole proprietorship capital account Cr. (Here I am supposing that no current liability is exist) Ans :- I don;t understand , what is this ?? Why should we debit to the Bank,Cash, Fixed Assets  ??? See your actual questions was that, that sole proprietor made invoices & customer deposits in partnership's account. Important thing is that when a sole proprietorship business converts into a partnership firm, what are their terms about how to carry all the debit & credit balances in partnership firms?? Do things accordingly .    3   Moreover, for keeping record clear, we can follow fluctuating method in partnership and under this method, we can open a current account of proprietorship owner in partnership.  If we earn profit or loss, it will go in current account and capital account of proprietorship can be reduced by drawing account if we want to pay received amount of debtors which transferred from proprietorship.   Ans: No i don't think such kind of an exercise happening in accounts, but wait for any experts answers regarding this.

Dear Narendra Sir,

Thanks for your valuable reply.

Your reply of 1st query:

Ans. : - Yes you can create a capital account in partnership books & you may be credited to it.

My Response: Thanks for confirmation or endorsement.

Your reply of 2nd query:

Ans :- I don;t understand , what is this ?? Why should we debit to the Bank,Cash, Fixed Assets  ??? See your actual questions was that, that sole proprietor made invoices & customer deposits in partnership's account. Important thing is that when a sole proprietorship business converts into a partnership firm, what are their terms about how to carry all the debit & credit balances in partnership firms?? Do things accordingly.

My Response: I would like to inform you that the term at the time of converting proprietorship to partnership are:

All the bank fund, cash in hand, debtors will transfer into partnership as well as liabilities of proprietorship will pay from partnership.

That is why for transferring amount of above accounts, I will open capital account of proprietorship in partnership and debit all the balances of propritoship assets in partnership to increase the assets.

Please let me know is it correct procees to transfer balances ? If you have better solution, please share as I mentioned terms which you asked.

Your reply of 3rd query:

Ans: No i don't think such kind of an exercise happening in accounts, but wait for any experts answers regarding this.

My Response:

No answer of any expert received yet.

Can you help me to get answer of this query from any of your friend, colleague and experts in your circle ?

Your kind response in this regard will be highly appreciated.

Originally posted by : My Videos
	Originally posted by : NARENDRA Dear My Videos, Ur Query -1" I want to know that is it better to create a capital account of owner of sole proprietor (who is partner in partnership now and not operating proprietorship business) in partnership books ? " Ans. : - Yes you can create a capital account in partnership books & you may be credited to it. 2 and after opening it, can we pass following entry to transfer the balances of sole proprietorship in partnership books:Debtor 1 Dr.Debtor 2 Dr.Bank Dr.Cash Dr.Fixed Assets Dr.Owner of sole proprietorship capital account Cr. (Here I am supposing that no current liability is exist)Ans :- I don;t understand , what is this ?? Why should we debit to the Bank,Cash, Fixed Assets  ??? See your actual questions was that, that sole proprietor made invoices & customer deposits in partnership's account. Important thing is that when a sole proprietorship business converts into a partnership firm, what are their terms about how to carry all the debit & credit balances in partnership firms?? Do things accordingly .  3 Moreover, for keeping record clear, we can follow fluctuating method in partnership and under this method, we can open a current account of proprietorship owner in partnership. If we earn profit or loss, it will go in current account and capital account of proprietorship can be reduced by drawing account if we want to pay received amount of debtors which transferred from proprietorship. Ans: No i don't think such kind of an exercise happening in accounts, but wait for any experts answers regarding this.   Dear Narendra Sir,Thanks for your valuable reply.Your reply of 1st query:Ans. : - Yes you can create a capital account in partnership books & you may be credited to it.My Response: Thanks for confirmation or endorsement.Your reply of 2nd query:Ans :- I don;t understand , what is this ?? Why should we debit to the Bank,Cash, Fixed Assets  ??? See your actual questions was that, that sole proprietor made invoices & customer deposits in partnership's account. Important thing is that when a sole proprietorship business converts into a partnership firm, what are their terms about how to carry all the debit & credit balances in partnership firms?? Do things accordingly.My Response: I would like to inform you that the term at the time of converting proprietorship to partnership are:All the bank fund, cash in hand, debtors will transfer into partnership as well as liabilities of proprietorship will pay from partnership.That is why for transferring amount of above accounts, I will open capital account of proprietorship in partnership and debit all the balances of propritoship assets in partnership to increase the assets.Please let me know is it correct procees to transfer balances ? If you have better solution, please share as I mentioned terms which you asked.Your reply of 3rd query:Ans: No i don't think such kind of an exercise happening in accounts, but wait for any experts answers regarding this.My Response:No answer of any expert received yet.Can you help me to get answer of this query from any of your friend, colleague and experts in your circle ?Your kind response in this regard will be highly appreciated.

Dear Narendra Sir,

Your kind response awaited on above.

Originally posted by : NARENDRA
	Leave it whatever happened in the past, do it now as per discussed & most important make policy at once & walk a way on the same path.

Dear Narendra Sir,

Thanks a lot to help me out and support regarding my query. 

It is informed you that I searched about this matter on YouTube and found satisfactory solution with journal entry. Link of said video is given below for your information and knowledge:

https://m.youtube.com/watch?v=7kD4lS0js-E

Thanks once again.