Fundamental of Partnership || Introduction-7 || Class-12th || Accounting || By- Dr. Mani Kumar

Interest on Partner's Loan refers to the interest paid by a partnership firm to a partner who has provided a loan to the business. This is treated as a financial obligation for the firm and is recorded as an expense in the Profit and Loss Account. Commission to a Partner refers to the amount paid to a partner as a reward for their efforts in managing the business or achieving specific financial targets. It is typically agreed upon in the partnership deed and may be calculated as a percentage of net profit before or after charging such commission. Past Adjustments refer to the corrections made in the books of accounts when errors or omissions are identified after the final accounts have been prepared and distributed among partners. These adjustments ensure fairness among partners by rectifying the mistakes related to profit-sharing, interest on capital, interest on drawings, salary, or commission. Partner refers to an assurance given to a new partner that they will receive a minimum amount of profit, irrespective of the firm’s overall profitability. This guarantee is usually provided by the existing partners, either individually or jointly, or by the firm itself. Limited Liability Partnership (LLP) is a type of partnership firm where the liability of the partners is limited to the extent of their agreed contribution to the firm. It combines the features of a partnership and a company, providing flexibility in management while limiting personal liability. Topic Cover in this Video:- Interest on Partner's Loan Commission to a Partner Past Adjustment Guarantee to a New Partner L.L.P #accounts #accounting #commerce #Partnership #Exams