Which of the following is a major point of difference between accounting for a corporation versus accounting for a partnership?
A) Recording withdrawals of the owners.
B) Recording sales revenue.
C) Recording rent expense.
D) Recording office supplies used.

Question

Quizplus · Accepted Answer

Partnerships do not have shareholders, so withdrawals by the owners (partners) must be recorded as a reduction in partner's equity. Corporations, on the other hand, have shareholders who do not withdraw from the company, but rather receive dividends from the company's profits. Therefore, accounting for withdrawals is not a major point of difference between the two types of entities. Recording sales revenue, rent expense, and office supplies used are all standard accounting practices and would be recorded in a similar way for both partnerships and corporations.

Which of the Following Is a Major Point of Difference