The use of average capital in distributing profits and losses results in equitable distribution thereof. II. When partners are entitled to salaries, they are to be credited for this even when the operation results in a loss. a. ONLY THE 1ST STATEMENT IS TRUE b. ONLY THE 1ST STATEMENT IS FALSE c. BOTH STATEMENTS ARE FALSE d. BOTH STATEMENTS ARE TRUE
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
I. |
The use of average capital in distributing |
II. |
When partners are entitled to salaries, they are to be credited for this even when the operation results in a loss. |
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