Trusts and Partnerships
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Trusts and Partnerships
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Trusts and Partnerships
Where the JobBag database is being run for a Trust or a Partnership, the beneficiaries (Trust) or partners need to have accounts set up in the Equity section of the ledger that reflect their entitlements in the business. Note that in Trusts and Partnerships, the profit of the enterprise must be distributed to the Beneficiaries/Partners, it can’t be retained within the trust. I.e. there should be no Retained Earnings in a Trust or Partnership.
At the end of the financial year (normally), the final profit is calculated and then distributed to the beneficiaries/partners by way of a General Journal:
Account | Report | Debit | Credit |
Beneficiary A Distributions (Partner A Share of Profits) | Balance Sheet | 37,500 |
Account Structure for Trusts
In a Trust database, each beneficiary needs to have their own account structure:
Account Name | Account Type | Totaling Mode |
Beneficiary A Trust Distributions | Posting account | Period to Date, reset to the Opening Balance account |
Beneficiary A Closing Balance | Total Account | Period to Date, total accounts do not get reset, their balances are calculated from the accounts that add to them. |
Repeat this structure for each beneficiary.
Account Structure for partnerships
In a Partnership database, each Partner needs to have their own account structure:
Account Name | Account Type | Totaling Mode |
Partner A Share of Profit | Posting account | Period to Date, reset to the Opening Balance account |
Partner A Closing Balance | Total Account | Period to Date, total accounts do not get reset, their balances are calculated from the accounts that add to them. |
Repeat this for every Partner.
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