Accounts

Effect of Admission of a Partner

Admission of a new partner is a major event in a partnership business. A new admission can take place only with the unanimous consent of all the existing partners. New partners are admitted for several reasons. Additional capital contribution, fresh ideas more contacts etc. are some of the advantages in admitting a new partner.

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I Wish to convey that the depreciation is an operating expenditure. This concept should be remembered when you compute the operating profit. At the same time do not forget to add back this expenditure to the P&L A\c,while calculating Net Operating Profit for the purpose of Cash Flow Statement.

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