Firm & Individual
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 March 2011
dear sir i have lot of confuse for partnership firm & individual account. my question:- our firm in 3 partner after closing the year one partner net profit transfer in individual account howz it transfer by cheque or cash..& individual person have a partnership firm so please give information regards this that partner net profit transfer in partnership firm or individual personal return ..& how manage two account individual & partnership firm..its very urgent please help for this .. Hardeep
03 March 2011
Your question is not much clear. What I understood out of it is u wanna know how the profit is transferred in case of Individual & in case of Firm and how an Individual gets the credit of his share of profit out of Firm's Profit.
See in case of firm proper books of accounts are maintained and a separate account of individual partners in form of Ledger are kept. A current account by the name of firm is opened in Bank and all the transactions are done either through it or from cash-in-hand.
Profit before adjustment is calculated and Interest on capital and Remuneration to partner is calculated according to the limit prescribed by the Income Tax Act.
After that the remaining Profit/loss is apportioned b/w all the partners in the profit sharing ratio and credited to his capital A/c.
Partner can withdraw his share of profit in form of drawings through cheque from firm's C/A or C/C a/c or as cash by taking it from firm cashier. Such entries will be dealt in cash book.
Other views are welcomed...
See in case of firm proper books of accounts are maintained and a separate account of individual partners in form of Ledger are kept. A current account by the name of firm is opened in Bank and all the transactions are done either through it or from cash-in-hand.
Profit before adjustment is calculated and Interest on capital and Remuneration to partner is calculated according to the limit prescribed by the Income Tax Act.
After that the remaining Profit/loss is apportioned b/w all the partners in the profit sharing ratio and credited to his capital A/c.
Partner can withdraw his share of profit in form of drawings through cheque from firm's C/A or C/C a/c or as cash by taking it from firm cashier. Such entries will be dealt in cash book.
Other views are welcomed...
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