Partnership
Partnership — a business owned by two or more people in order to make a profit.
| Advantages | Disadvantages |
|---|---|
| More capital and resources available. | Unlimited liability. |
| Easy to establish and manage. | Profits must be shared. |
| More skills and knowledge. | Responsibilities are shared. |
Appropriation account — shows how the net profit is distributed between the partners.
Current vs capital account
| Current account | Capital account |
|---|---|
| Shows the value of the investment a partner currently has in the business. | Shows the main investment a partner has in the business. |