Answered: Which of the following IS an allowable…

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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Which of the following IS an allowable deduction for partnerships?

Select one:
Superannuation contributions to partners
Interest paid to partners on their capital contributions to the partnership
Capital loss incurred by the partnership on the sale of a partnership asset
Salary payments to the partners
Interest paid on a bona fide loan from a partner to the partnership

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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