Financial statements for a partnership are similar to those for a sole proprietorship, but with some key differences. The three financial statements for a partnership are the income statement, capital statement (or statement of owner's equity), and balance sheet.
The income statement for a partnership is similar to that of a sole proprietorship, but it also includes information on the division of net income among the partners.
The capital statement, on the other hand, is specific to partnerships, as it shows the changes in each partner's capital account and the total partnership capital during the year. These changes can be due to additional investments, drawdowns, and net income or loss. The sources of information for preparing the capital statement include the income statement, each partner's capital account, and the drawdown accounts.
The balance sheet for a partnership is similar to that of a sole proprietorship, except in the owner's equity section. In a partnership, the capital balances of each partner are shown in the balance sheet.
