What is a key distinction in the presentation of the Income Statement in a Partnership?O presentation of Gross Profitit includes a presentation of how profit is divided among partnersO presentation of notes in the Income Statementclassification of expenses into Selling and Administrative expenses

Income statement shows the net income or net loss that is calculated by deducting the expenses from…

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Business

Accounting

What is a key distinction in the presentation of the Income Statement in a Partnership

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 8MC: A well written partnership agreement should include each of the following except ________. A. how to...

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A well written partnership agreement should include each of the following except ________. A. how to settle disputes B. the name of the partnership C. division of responsibilities D. Partners individual tax rate
What types of bases for dividing partnership net income or net loss are available?
Which of the following is not a component of the formula used to distribute income? Salary allocation to those partners working B Interest on the average capital investments Interest on notes to partners D After all other allocation, the remainder divided according to the profit and loss sharing ratio
Which financial statement of a partnership reflects the profitability of the business? A. Statement of Financial Position B. Statement of Cash Flows C. Statement of Comprehensive Income D. Statement of Changes in Equity
Which of the following items is generally reported separately on a partnership return? a.Factory rent expense b.Interest expense on business debts c.Ordinary income from the operations of the partnership business d.Net rental income e.Bonus depreciation
The objective of preparation of income statement of partnership is: a. To show how net profit has been distributed among partners b. To show the financial position of business c. To show the ratio of capital of partners d. To show the income and expenses of the partnership firm
Which one of the following statement is not correct on preparation of partnership final accounts? a. Adjustments will be recorded have dual effects in the income statement and statement of financial position b. Preparation of income statement is same as sole proprietorship business c. Net profit from income statement will be transferred to partners' capital account d. Accounting principles are same as sole proprietorship business
Salaries provided to partners are generally accounted for as:________ a. Part of the cost of revenues of the partnership b. An operating expense of the partnership c. A profit-sharing mechanism d. Permanent withdrawals of the partners
If there is a provision for division of profits but not losses in the partnership agreement, it is concluded that: O Losses should not be divided to the capital accounts, but matched against future earnings Losses should be divided equally O Losses should be divided using the same approach as division of profits O Losses should be allocated according to the ratio of capital account balances
1) The objective of preparation of income statement of partnership is: a.To show the ratio of capital of partners b.To show how net profit has been distributed among partners c.To show the income and expenses of the partnership firm d.To show the financial position of business
Describe the Advantages and Disadvantages of Organizing as a Partnership from an accounting view
How should losses in a partnership be divided between the capitalist partners? The ranking should be: a. agreement-profit and loss -capital b. capital-agreement-profit and loss ratio c. agreement-profit ratio-capital d. profit and loss-capital-agreement.