Although an article of incorporation and a partnership agreement can give similar

information, like the name of the firm, address, and nature of the business, there
are some key differences among the two. An article of partnership is a document
that formalizes an agreement among people who are entering a business
arrangement to pool their labor and capital together and according to the text,
provide the underlying basis for partnership accounting. Its a legal covenant but
may be oral or written. An article of incorporation is a set of formal documents filed
with a government to document legally the creation of a corporation, unlike a
partnership agreement where it is not filed with the government.
A drawing account measures the amount of assets that a specific partner takes from
the business during the current period. Usually, its only regularly allowed
distributions that are recorded in the drawing account. The withdrawals that are
more sporadic and generally larger are recorded as reductions to the partners
capital balance.
Goodwill may be allocated to a new partner entering the partnership under a couple
of different reasons. One of the most common reasons is that the partner is bringing
a non-asset attribute to the partnership. Other reasons include the partner having a
professional expertise or a well-established clientele.
A safe capital balance, according to the text, is the lowest possible amount that a
partner must retain in their capital accounts to be able to absorb all future losses.
The balances are computed by projecting a series of assumption where the
partnership has maximum losses during the rest of the liquidation process. Noncash assets are under the assumption that they have no resale value and the
expenses of liquidation are given the largest estimation possible. Partners are
considered insolvent. So after all of this is computed, the amount of capital balance
that remains would be able to be distributed to the partners without any risk.
http://www.investopedia.com/terms/a/articlesofincorporation.asp
Hoyle, Joe, Thomas Schaefer and Timothy Doupnik. Advanced Accounting, 12th
edition. New York: McGraw-Hill Education, 2015.