Partnership accounts are financial statements detailing a business's profitability and how profits are distributed among partners. General partnerships do not need to file annual accounts, but they must report earnings to GOV.UK. Limited Liability Partnerships (LLPs) must submit these records to Companies House.

The preparation of partnership accounts relies on four main elements:

1. Income Statement: Prepared identically to a sole trader's to determine the overall net profit or loss of the business.
    
2. Appropriation Account: Calculates how the net profit is divided. It adjusts the net profit by adding interest on drawings, then deducting partner salaries and interest on capital.
    
3. Capital Accounts: Tracks the initial fixed capital contributed by each partner, which only changes when extra capital is injected or permanently withdrawn.
    
4. Current Accounts: Tracks daily earnings and withdrawals. It is credited with partner salaries, capital interest, and profit shares, and debited with drawings and drawings interest.