AccountingQA Latest Questions

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A. Furniture B. Capital C. Sales D. Commission earned

  2. Ishika Pandey Curious ca aspirant

    Definition Where the total of the debit side is more than the credit side therefore the difference is the debit balance and is placed credit side as “ by balance c/d “ A furniture account that is an asset has a debit balance. Debit balance may arise due to timing differences in which case income wilRead more

    Definition

    Where the total of the debit side is more than the credit side therefore the difference is the debit balance and is placed credit side as “ by balance c/d “

    A furniture account that is an asset has a debit balance.

    Debit balance may arise due to timing differences in which case income will be accrued at the year’s end to offset the debit.

    The amount is shown in the record of a company s finances, by which its total debits are greater than its total credits.

    The account which has debit balances are as follows:

    • Assets accounts

    Land, furniture, building machinery, etc

    • Expenses accounts

    Salary, rent, insurance, etc

    • Losses

    Bad debts, loss by fire, etc

    • Drawings

    Personal drawings of cash or assets

    • Cash and bank balances

    Balances of these accounts

    The account has credit balances as follows:

    • Liabilities accounts

    Creditors, bills payable, etc

    • Income accounts

    Salary received, interest received, etc

    • Profits

    Dividends, interest, etc

    • Capital

    Partners Capital

     

    Here are some examples showing the debit balances and credit balances of the accounts :

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  2. Ishika Pandey Curious ca aspirant
    This answer was edited.

    Definition Debit balance may arise due to timing differences in which case income will be accrued at the year's end to offset the debit. The amount is shown in the record of a company s finances, by which its total debits are greater than its total credits. The account which has debit balances are aRead more

    Definition

    Debit balance may arise due to timing differences in which case income will be accrued at the year’s end to offset the debit.

    The amount is shown in the record of a company s finances, by which its total debits are greater than its total credits.

    The account which has debit balances are as follows:

    • Assets accounts
    Land, furniture, building machinery, etc

    • Expenses accounts
    Salary, rent, insurance, etc

    • Losses
    Bad debts, loss by fire, etc

    • Drawings
    Personal drawings of cash or assets

    • Cash and bank balances
    Balances of these accounts

    In class 11th, we learned about all these accounts that have debit balances.
    Where the total of the debit side is more than the credit side therefore the difference is the debit balance and is placed credit side as “ by balance c/d “

    Here are some examples showing the debit balances of the accounts :

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I am looking for accounting entries asked in interviews.

  2. SidharthBadlani CA Inter Student

    Interviews can appear daunting. But don't worry we are here for you. Here is a comprehensive list of journal entries and other technical and behavioral questions mostly asked in interviews. Journal entries for the following situations are most frequently asked: A cashier is absconding with cash wortRead more

    Interviews can appear daunting. But don’t worry we are here for you. Here is a comprehensive list of journal entries and other technical and behavioral questions mostly asked in interviews.

    Journal entries for the following situations are most frequently asked:

    • A cashier is absconding with cash worth 10,000.
    • Bad debts worth ₹10,000 have been recovered.
    • The Head Office received ₹ 5,000 from its Branch.
    • Issue of bonus shares worth 5,00,000
    • Depreciation on land
    • Contra Entries
    • Inventory used for personal purposes
    • Personal car transferred to inventory

    Besides these, there are certain general questions that are almost always asked. You must be well prepared for these questions. For example,

    • Introduce yourself
    • Why do you want to join this company?
    • Why do you not want to join our competitors? ( prepare one or two specific competitors)
    • Why do you think you are fit for this role?

    Behavioral Questions

    Behavioral questions seek to evaluate your personality and access how you would act or react in certain situations.

    Here are some of the most frequently asked behavioral questions:

    • Tell me about an experience where you faced stress and how you handled it.
    • How do you react when team members do not agree with you?
    • How do you react when you do not agree with the team leader?
    • What is the biggest challenge that you have ever faced in your life and how did you handle it?
    • Tell me about a time when you had to take a leadership role.
    • Tell me about a time when you took initiative.
    • Tell me about a time when you failed and how you handled it.
    • Tell me about a time when you used your problem-solving skills
    • Tell me about the biggest mistake you have committed in life.
    • Tell me about your strengths and weaknesses.
    • Have you ever worked with a team before?
    • Where do you see yourself in 5 years?
    • Tell me about the biggest mistake you committed in your life.

    Technical questions

    Technical questions are those that test your academic knowledge of accounting. They intend to assess your conceptual understanding and clarity of the subject. Here’s a list of technical questions related to accounting most frequently asked in interviews:

    • What is working capital?
    • What is AS 1? ( Prepare all AS)
    • What is the P/E ratio?
    • A company takes a loan of ₹5,00,000 to buy an asset. State the impact on the cash flow statement and balance sheet.
    • A company issues debentures worth ₹10,00,000. State the impact on the cash flow statement and balance sheet.
    • What is the difference between a trial balance and a balance sheet?
    • Differentiate between dormant and inactive accounts.
    • What is Acid-Test Ratio?
    • How can we estimate bad debts?
    • How can a company improve its market capitalization?
    • What is GAAP?
    • Why do we need AS?
    • What are fictitious assets?
    • What is the difference between provision and reserve?
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  2. Razeen_Nakhwa

    Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs vs. when payment is received or made.  The most common accrual accounting examples are sales on credit, purchases on credit, rent paid, electricity expense, depreciation, audit fees, and otherRead more

    Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs vs. when payment is received or made.  The most common accrual accounting examples are sales on credit, purchases on credit, rent paid, electricity expense, depreciation, audit fees, and other such things.

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  2. SidharthBadlani CA Inter Student
    This answer was edited.

    Accrued expenses are those expenses that have already been incurred but not paid. The business has already received the benefit of these goods or services but is yet to pay for them. For example, X Ltd took an insurance policy on 30th September 20XX. The premium is to be paid annually on 30th SeptemRead more

    Accrued expenses are those expenses that have already been incurred but not paid. The business has already received the benefit of these goods or services but is yet to pay for them.

    For example,

    • X Ltd took an insurance policy on 30th September 20XX. The premium is to be paid annually on 30th September every year for the next 20 years.
    • While preparing the financial statements for the year 20XX – 20XX+1, the business will recognize insurance premiums for the period 30th September, 20XX to 31st March 20XX+1 as an accrued expense. The premium would be actually paid on September 20XX+1.
    • As we can see, the company has already incurred the insurance premium for the period 30th September, 20XX to 31st March 20XX+1.
    • Thus, it has to recognize the same as an expense of that period only even though it will be actually paid in the next accounting period.

    Why does the concept of accrued expenses arise in accounting?

    The concept of accrued expenses arises in accounting because accounting records transactions on an accrual and not cash basis.

    Accounting on an accrual basis implies recording transactions as and when they are incurred while recording transactions on a cash basis means recording them as and when cash is actually paid for receiving those services.

    For example,

    • X Ltd ordered 5 televisions from LG. It received the delivery of all 5 televisions on 1st March, 20XX. However, it received the invoice for those televisions on 31st April, 20XX.
    • Now, the question arises as to whether while preparing the financial statements on 31st March, 20XX, X Ltd will recognize the cost of those 5 televisions as a purchase expenditure.
    • If X Ltd were recording transactions on a cash basis, they would not have recognized the cost of those 5 televisions as a purchase expenditure in the financial statements prepared on 31st March 20XX as the payment had been made in the next financial year.
    • Thus, in that case, that purchase would be recorded in the financial statements of the next year.
    • However, accounting is done on an accrual basis. As per accrual basis, as the event of purchase has occurred during the financial year ending 31st March 20XX, it must be recorded in financial statements for that period only.
    • Thus, due to the accrual basis, X Ltd will record that expenditure in the financial statements prepared on 31st March 20XX even though cash has been paid in the next financial year.

    Treatment of Accrued Expenses

    Accrued expenses are classified as current liabilities. That is because the business has a short-term obligation to pay these expenses. The other party has a legal right to receive the amount due. In other words, accrued expenses become payable in the near term.

    As current liabilities, accrued expenses are carried in the balance sheet on the liabilities side. They are also recognized in the income statement as an expense as per the concept of accrual basis of accounting.

    Conclusion

    Accrued expenses are the expenses for which the business has already received the benefit of goods or services but which are payable in an accounting period other than the one in which such benefit is received.

    As per the accrual basis of accounting, they are recognized in the year in which the expense is incurred. The expense is carried forward as a current liability until the period in which it is actually paid.

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  2. SidharthBadlani CA Inter Student

    No, forensic accounting and auditing are not the same thing. Forensic accounting is a much more detailed task that is normally done when fraud or other illegal activity is suspected. The evidence collected by forensic accountants is used in the court of law. Forensic accounting is mostly done when aRead more

    No, forensic accounting and auditing are not the same thing. Forensic accounting is a much more detailed task that is normally done when fraud or other illegal activity is suspected.

    The evidence collected by forensic accountants is used in the court of law. Forensic accounting is mostly done when a suit has already been filed or is likely to be filed.

     

    How Forensic Accounting Differs from Auditing?

    Auditing means an inspection of financial statements done by experts with a view to obtaining reasonable assurance as to whether or not the financial statements correctly state the financial position and financial performance of the entity during the period under audit.

    Forensic accounting is the use of accounting skills to detect any fraud, embezzlement or other illegal activity that may have occurred within the entity.

    This is how forensic accounting differs from auditing:

    • Forensic accounting is different from auditing in that forensic accounting is done with an intention to identify and uncover frauds while auditing is normally done to provide the users of financial statements reasonable assurance that the statements are correct and true.
    • Auditing usually identifies only those misstatements that are material. Materiality is the one of the main concerns of auditors. However, in forensic auditing every type of misstatement is scrutinized as material. The forensic accountants try to identify fraud in every misstatement.
    • Forensic accounting is usually done only when fraud and other illegal activities are suspected and some suit has been filed or is likely to be filed while auditing of annual financial statements is mandatory for firms meeting certain threshold limits of turnover/gross receipt/revenue.

    Importance of Forensic Accounting

    • Forensic accounting is used to detect frauds, forgery, misappropriation of assets and other illegal activities.
    • The evidence collected during forensic accounting can be used in a court of law. Often, those conducting forensic accounting are also called upon to testify as experts in a court.
    • Forensic accounting identifies loopholes in the internal controls of an entity that has been or may be exploited for conducting frauds and other illegal activities.
    • Forensic accountants suggest different measures that an entity can take to make it’s internal controls more effective and prevent illegal activities in the future.

    Conclusion

    Forensic accounting and auditing are very different from each other. While auditing is done to identify only material misstatement, forensic accounting is done with an objective of detecting possible fraud or other illegal activity. Auditing of financial statements is mandatory for firms exceeding certain threshold limits of turnover/gross receipts/revenue while financial accounting is usually done when a suit for fraud, embezzlement etc has been filed or is likely to be filed.

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  2. Poorvi_*
    This answer was edited.

    When the Accumulated depreciation account is not maintained, the journal entry for vehicle depreciation shall be                              Particulars     Debit   Credit Depreciation a/c                                              Dr.      (xxx)      To Vehicle a/c      (xxx) (Being DepreciationRead more

    When the Accumulated depreciation account is not maintained, the journal entry for vehicle depreciation shall be

                                 Particulars     Debit   Credit
    Depreciation a/c                                              Dr.      (xxx)
         To Vehicle a/c      (xxx)
    (Being Depreciation charge on Vehicle made)

    For example, let us assume that a vehicle (Bike) was purchased on 1st April 2019 with INR. 2,50,000, the rate of depreciation is 15% and also the Company follows the straight-line method of calculating depreciation.

    Then the journal entries shall be,

    The depreciation charge for the 1st Year 

            Date                                Particulars  Debit  Credit
    31-03-2020 Depreciation a/c Dr.  37,500
        To Vehicle a/c  37,500
    (Being Depreciation made on Vehicle)

    The depreciation charge for the 2nd Year 

            Date                                Particulars  Debit  Credit
    31-03-2021 Depreciation a/c Dr.  37,500
        To Vehicle a/c  37,500
    (Being Depreciation made on Vehicle)

    The depreciation charge for the 3rd Year

            Date                                Particulars  Debit  Credit
    31-03-2022 Depreciation a/c Dr.  37,500
        To Vehicle a/c  37,500
    (Being Depreciation made on Vehicle)

    The respective ledger accounts for all three years are given below:

    When the Accumulated depreciation account is maintained, the journal entry for vehicle depreciation shall be

                                 Particulars   Debit   Credit
    Depreciation a/c                                              Dr.    (xxx)
         To Accumulated depreciation a/c    (xxx)
    (Being Depreciation charge on Vehicle made)

    Taking the above said example,

    The depreciation charge for the 1st Year 

            Date                                Particulars  Debit  Credit
    31-03-2020 Depreciation a/c Dr.  37,500
        To accumulated depreciation a/c  37,500
    (Being Depreciation made on Vehicle)

    The depreciation charge for the 2nd Year 

            Date                                Particulars  Debit  Credit
    31-03-2021 Depreciation a/c Dr.  37,500
        To accumulated depreciation a/c  37,500
    (Being Depreciation made on Vehicle)

    The depreciation charge for the 3rd Year

            Date                                Particulars  Debit  Credit
    31-03-2021 Depreciation a/c Dr.  37,500
        To accumulated depreciation a/c  37,500
    (Being Depreciation made on Vehicle)

    The respective ledger accounts for all three years are given below:

     

     

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  2. Mitika

    Straight Line Depreciation Journal Entry Straight-line depreciation refers to the diminishing value of assets over the life of the asset. In other words, the cost of the asset spreads evenly over the useful life of the assets. The salvage value or Residual value of an asset means the estimated valueRead more

    Straight Line Depreciation Journal Entry

    Straight-line depreciation refers to the diminishing value of assets over the life of the asset. In other words, the cost of the asset spreads evenly over the useful life of the assets.

    The salvage value or Residual value of an asset means the estimated value of the asset at the end of its useful life.

    The depreciation can also be charged with another method like Written Down Value (WDV) Method.

     

    Formula

    Depreciation per annum = ( Cost of asset – Salvage Value) / Useful Life

     

    The journal entry for the depreciation is:

    JOURNAL ENTRIES

    		  
    Depreciation on Asset A/C                               DR.
                                To Asset A/C
    (Being depreciation charged on asset)

     

    Now let us understand this with an example, suppose XYZ Ltd. has an asset of value 90,000 with a useful life of 3 years. The company uses the straight-line method of depreciation to depreciate the asset in its book.

     

    So, the depreciation per annum would be calculated as:-

    = 90,000/3

    = 30,000

     

    In Year 1, the depreciation will be charged as 30,000 for this year. It will be debited to the  depreciation account and credited to the asset account. Thus, the value of the asset at the end of year 1 will be 60,000 (90,000-30,000).

    JOURNAL ENTRIES

    		  
      DR CR
    Depreciation on Asset A/C                                                   30,000
              To Asset A/C                                                                                                              30,000
    (being depreciation charged on asset)

     

    In Year 2, the depreciation will be charged as  30,000. The entry would be the same as the previous year. The value of the asset at the end of year 2 will be 30,000 (60,000-30,000).

    JOURNAL ENTRIES  
      DR CR
    Depreciation on Asset A/C                                                   30,000
              To Asset A/C                                                                                                                  30,000
    (being depreciation charged on asset)

     

    At last in Year 3, the depreciation will be charged 30,000. The entry would be the same. The value of the asset at the end of year 3 will be Nil (30,000- 30,000).

    JOURNAL ENTRIES

    		  
      DR

    CR
    Depreciation on Asset A/C                                                30,000
              To Asset A/C                                                                                                            30,000
    (being depreciation charged on asset)

     

    The depreciation will be charged to the profit and loss account for the year as it is an expense for the company.

     

    The entries will be posted into depreciation account as mentioned:

    DEPRECIATION A/C  
    Date Particulars Amount Date Particulars Amount
    Year 1 To Asset A/C 30,000   By Profit and Loss A/C 30,000
        30,000     30,000
               
    Year 2 To Asset A/C 30,000   By Profit and Loss A/C 30,000
        30,000     30,000
               
    Year 3 To Asset A/C 30,000   By Profit and Loss A/C 30,000
        30,000     30,000
               

     

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  2. Vishnu_K Nil
    This answer was edited.

    Meaning of Partnership Deed A Partnership Deed is a written agreement between partners who are willing to form a Partnership Firm. It is also called as a Partnership Agreement. Contents of a Partnership Deed A Partnership Deed shall mainly include the following contents: Name of the Partnership firmRead more

    Meaning of Partnership Deed

    A Partnership Deed is a written agreement between partners who are willing to form a Partnership Firm. It is also called as a Partnership Agreement.

    Contents of a Partnership Deed

    A Partnership Deed shall mainly include the following contents:

    1. Name of the Partnership firm
    2. Address of the Partnership firm
    3. Details of all the Partners
    4. Date of commencement of the Business
    5. The amount of capital contributed by each of the partners forming the Partnership firm
    6. The Profit sharing ratio (The Business profit shared among the partners on a ratio basis)
    7. The rate or amount of Interest on Capital & the rate or amount of Interest on drawings to each partner respectively.
    8. The salary payable to each of the partners of the firm.
    9. The rights, duties, and power of each partner of the firm.
    10. The duration of the existence of the firm

    Importance of Partnership Deed

    1. Proper regulation of duties, liabilities, and rights of the partners are made in the partnership deed and hence there cannot be any issue during the course of the business.
    2. There can be no disputes between the partners upon Profit sharing, salary, commission, interest on capital, and interest on drawings.
    3. A partnership Deed acts as Legal proof for the conduct of the business and is used for many other registrations such as GST registration, and other related purposes.

     

    Format of a Partnership Deed

    The Partnership Deed shall originally be executed on an Indian Non-Judicial stamp paper.

    The format of the Partnership deed is given below with an assumption that 4 partners are forming the Partnership.

                                                                    PARTNERSHIP DEED

    This deed of partnership is made on [Date, Month, Year] between:

    1. [First Partner’s Name], [Son/Daughter] of [Mr. Father’s Name], residing at [Address Line 1, Address Line 2, City, State, Pin Code] hereinafter referred to as FIRST PARTNER.

    2. [Second Partner’s Name], [Son/Daughter] of [Mr. Father’s Name], residing at [Address Line 1, Address Line 2, City, State, Pin Code] hereinafter referred to as SECOND PARTNER.

    3. [Third Partner’s Name], [Son/Daughter] of [Mr. Father’s Name], residing at [Address Line 1, Address Line 2, City, State, Pin Code] hereinafter referred to as THIRD PARTNER.

    4. [Fourth Partner’s Name], [Son/Daughter] of [Mr. Father’s Name], residing at [Address Line 1, Address Line 2, City, State, Pin Code] hereinafter referred to as FOURTH PARTNER.

     

    Whereas, the parties hereto have agreed to commence business in partnership and it is expedient to have a written instrument of partnership. Now, this partnership deed witnesses as follows:

    1. BUSINESS ACTIVITY
    The parties hereto have mutually agreed to carry on the business of [Description of Business Activity Proposed].

    2. PLACE OF BUSINESS
    The principal place of the partnership business will be situated at [Address Line 1, Address Line 2, City, State, Pin Code]

    3. DURATION OF PARTNERSHIP
    The duration of the partnership will be at will.

    4. CAPITAL OF THE FIRM
    Initially, the capital of the firm shall be Rs. [Total Partners Contribution].

    5. PROFIT SHARING RATIO
    The profit or loss of the firm shall be shared equally among all the partners and transferred to the partner’s current account.

    6. MANAGEMENT
    The [First Partner] of the firm shall be Managing Partner and he will look after all the day-to-day transactions of the firm and any legal activities in the name of the firm and the remaining partners shall cooperate to do so.

    7. OPERATION OF BANK ACCOUNTS
    The firm shall open a current account in the name of [Partnership Firm Name] at any bank and such account shall be operated by [First Partner] and [Second Partner] jointly as declared from time to time to the Banks.

    8. BORROWING
    The written consent of all Partners will be required for the partnership to avail credit facilities from any financial institution.

    9. ACCOUNTS
    The firms shall regularly maintain in the ordinary course of business, true and correct accounts of all its transactions and also of all its assets and liabilities, the property books of account, which shall ordinarily be kept at the firm’s place of business. The accounting year shall be the financial year from 1st April onwards and the balance sheet shall be properly audited and the same shall be signed by all the Partners. Every Partner shall have access to the books and the right to verify their correctness.

    10. RETIREMENT
    If any partner shall at any time during the subsistence of the partnership, be desirous of retiring from the firm, it shall be competent from his to do so, provided he shall give at least one calendar month’s notice of his intention of doing so. The remaining partner shall pay the retiring partner or his legal representatives of the deceased partner, the purchase money of his share in the assets of the firm.

    11. DEATH OF PARTNER
    In the event of the death of any partners, one of the legal representatives of the deceased partner shall become the partner of the firm and in the event, the legal representative shows their denial to point the firm, they shall be paid part of the purchase amount calculated as on the date of the death of the partner.

    12. ARBITRATION
    Whenever there by any difference of opinion or any dispute between the partners shall refer the same to the arbitration of one person. The decision of the arbitration so nominated shall be final and binding on all partners, such arbitration proceedings shall be governed by Indian Arbitration Act, which is in force.

    In witness whereof, this deed of partnership is signed sealed, and delivered this [Day, Month, Year] at [City, State]:

    FIRST PARTNER                                            SECOND PARTNER

    [Address Line 1]                                                        [Address Line 1]
    [Address Line 2]                                                        [Address Line 2]
    [City, State, Pin Code]                                              [City, State, Pin Code]

    THIRD PARTNER                                            FOURTH PARTNER

    [Address Line 1]                                                         [Address Line 1]
    [Address Line 2]                                                        [Address Line 2]
    [City, State, Pin Code]                                              [City, State, Pin Code]

    WITNESS ONE                                                  WITNESS TWO

    [Address Line 1]                                                         [Address Line 1]
    [Address Line 2]                                                         [Address Line 2]
    [City, State, Pin Code]                                               [City, State, Pin Code]

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  2. Mitika

    Types of Partnership A partnership is an agreement between two or more people who comes together to run a business. There are different types of partnerships formed with different perspectives as mentioned: General Partnership Limited Partnership Limited Liability Partnership Partnership at will ParRead more

    Types of Partnership

    A partnership is an agreement between two or more people who comes together to run a business.

    There are different types of partnerships formed with different perspectives as mentioned:

    General Partnership

    Limited Partnership

    Limited Liability Partnership

    Partnership at will

    Partnership for a fixed term

     

    General Partnership

    It refers to the partnership where all partners actively manage the business and have unlimited legal liability. Generally, all the partners share equal profit and loss in the business and are also equally liable for the outsider’s loan.

    All the partners are responsible for the business’s day-to-day operations and managerial responsibility.

    If the partners decided to share profit and loss in any other ratio (unequal ratio), then they have to disclose this in a agreement called a partnership deed.

    In this, debts are equally borne by selling the partners assets of all the partners. In case of dissolution, if the partnership firm has taken a loan from outsiders and does not have sufficient funds to repay the amount then the payment can be done by selling the partner’s personal property.

    It can be formed by signing the partnership agreement that would be proved as evident in case of disagreement among partners. For instance, if any partner dies or leaves the firm then they should follow the content of the agreement.

    A general partnership does not pay the tax instead the partners personally report their income tax return.

     

    Limited Partnership

    In a Limited partnership, all the partners contribute capital but not necessarily all of them manage the business.

    The old partners add a new partner into the partnership to fulfill the financial needs of the business i.e. for capital. The rights of decision-making are issued to new partners on the basis of their contribution of capital. The new partner is not associated with day-to-day business activities. He /She is called a limited partner or silent partner.

    The liability partner has limited liability to the extent of his capital. The personal assets of the limited partner can not be used for the payment of the firm’s liability.

     

    Limited Liability Partnership

    It is a more popular type of partnership in today’s world. To form an LLP you have to register under the Limited Liability Partnership Act, 2008.

    In this, all the partners have limited liability to the extent of the capital investment in the business. The personal assets of the partners can not be used to discharge the liability of the partnership.

    A Minimum of 2 partners are required to form an LLP. However, no maximum limit on a number of partners.

    It has also some features of the company. It has a separate legal entity. The LLP can buy property in its own name and sue and be sued in its name.

    LLPs are often formed by professionals like Chartered Accountants, doctors and Legal firms.

     

    Features

    • It has a separate legal entity.
    • The cost of forming is low.
    • It requires less compliance and regulations.
    • Minimum two partners are required, no limit on the maximum number of partners.
    • The partners has limited liability.

     

    Partnership at will

    Partnership at will is a form of business where there is no fixed tenure of the partnership. That means there is no expiration of the partnership. But if the partnership is formed for a fixed duration and its period has expired and still continues then it will become a partnership at will.

     

    Partnership for a fixed term

    The partnership is created for a fixed duration of the interval. After the expiration of such duration, the partnership may come to an end.

    If the partners share profit and loss even after the expiration of the duration of the partnership then it will become a partnership at will.

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