what would be the journal entries if partners in a business agree to take out fixed profit every month. and what would be the category of accounts associated with this (expense, liability etc ?) pls give me the entry at the end of the month and when the actual payment is made in the first week of the next month
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Profit share entries
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Please follow the entries at the end of each month.
Profit and Loss A/c Dr
To Partners Capital A/c
With the amount of their ratios.
Beginning of each month.
Partners Capital A/cs Dr.
To Cash/Bank account.
With the amounts actual withdrawn by the partners
entry at the end of each month
1. at the end of month
Profit and loss a/c Dr .........
To Partners Capital a/c .........
2. at the time of actual payment
Partners Capital a/c Dr ........
To Cash/Bank A/c .........
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