Which of the following statements is correct?
A) If partners consider their cash withdrawals to be compensation for the work they do for the partnership,the amounts of the withdrawals should be charged to Salaries Expense.
B) If there is no specific agreement on the division of partnership profits and losses,they are divided equally among the partners.
C) If a salary is allowed to one partner,other partners also must receive a salary allowance.
D) None of these statements are correct.

Question

Quizplus · Accepted Answer

This statement is correct according to the default rules of partnership law. If the partnership agreement does not state otherwise, profits and losses are divided equally among the partners. Choices A and C are incorrect because they imply specific scenarios that may or may not be true, depending on the partnership agreement. Choice D is incorrect because at least one of the statements is correct.

Which of the Following Statements Is Correct