1. Accounting for Partnerships FLASHCARDS

2. Distributive share The amount of net income or net loss allocated to each partner Distributive share

3. Mutual agency The characteristic of a partnership by which each partner is empowered to act as an agent for the partnership, binding the firm by his or her acts Mutual agency

4. Unlimited liability The implication that a creditor can look to all partners’ personal assets as well as the assets of the partnership for payment of the firm’s debts Unlimited liability

5. Liquidation Termination of a business by distributing all assets and discontinuing the business Liquidation

6. Limited partner A member of a partnership whose liability is limited to his or her investment in the partnership Limited partner

7. For additional reinforcement of accounting terms, visit the crossword puzzle on this Web site.