Answered: In the establishment of a limited…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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5 - In the establishment of a limited partnership, the partners fulfilled their commitments in cash, promissory notes, fixtures and machinery. Accordingly, which of the following statements is false?
A) 121- Notes Receivable account is debited.

B) 501- Unpaid Capital account is debited

C) 255- Fixtures Account is debited.

D) 253- Facility Machinery Devices account is debited.

E) 100- Cash account is debited.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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