Partnership cessation accounts

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:26AM in AAT student discussion
If a partnership ceased trading on the 31 July but still owed money on a bank loan, should the loan be written off against the partners current accounts for the balance sheet at 31 July? Also what if the partnership is still owed money from debtors? Does the same apply?

Thanks for any help.

Dan

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Partnership cessation accounts

    I would have thought so Dan - someone else please correct me if I am wrong!

    My logic is going along the lines of when they cease trading, they no longer exist, so therefore they cannot have a balance sheet. Following on from that, if there were any assets, say £100K in the bank (ha ha) that would be split between the partners, so the converse must apply, that any debts would be the same. If it was a bank loan I am sure that the partners would be jointly and severally liable for the outstanding debt.

    Yes, I would net everything off against their capital/current accounts.

    Sorry - a rather longwinded answer :wink:

    Claudia


  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Partnership cessation accounts

    Thanks Claudia, just as I thought.

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