FRA Simulation ETB/P&L/Bs

System

have just taken my aat intermediate simulation for financial records and i have the following questions:

If the amount on the p&l is a debit is this a loss, if so when you create your appropriation account I assume you are sharing out the loss, so in which case on the partnership current accounts do the capital interest/salaries get entered as a credit balance or a debit balance?

Also then do you take the new current account balances to the balance sheet or the original balances from the etb and for a loss do these current account balances get added to the capital account balances or taken away??

If anyone could help asap it would be much appreciated.

Thanks

Charlotte :? :idea:

System

Re:FRA Simulation ETB/P&L/Bs

Any salaries and interest specified in the partnership agreement should be credited to current account as usual. Any net loss that you started with is increased by these figures, and the increased loss is debited to current accounts in the profit sharing ratio.

The balance sheet should show the updated current account balances, not those in the ETB. If they are credit balances they are added to capital, if they are debit balances they are subtracted (so it depends if the loss was significant enough to put the current accounts into debit).

Hope that helps,

Andrew Harrington

System

Re:FRA Simulation ETB/P&L/Bs

That is a big help, thank you!!