The method of preparing final accounts for the partnership firm is not different from the one followed for preparation of final accounts of a sole proprietary concern. Some of the important points to be taken carc ofwhile preparing the final accounts are as follows:

1. Capital Accounts 

There will be a separate capital account for each partner. For example, if A, B and C are three partners in a partnership firm, there will be three capital accounts, one each of A, B and C. The capital accounts may be maintained either on fixed or fluctuating capital system.

2. Profit and Loss Appropriation Account 

A separate Profit & Loss Appropriation Account may be prepared to show the distribution of profits among different partners.

3. Guarantee of profit to a partner 

The partnership agreement may provide for a guaranteed amount as profit to a partner (or partners). In such a case, the term of guaranteed profit will be significant only in those years, when the guaranteed amount of profit is more than the share or profit which the partner (or partners) concerned would have got otherwise in the absence of any guarantee. In such an event, the partner (or partners) to whom guarantee has been given will get the guaranteed share of profit while the others will have to share the remaining profits (or bear the losses) as per the terms of the partnership agreement.