The allocation of net income and its impact on partners' equity balances should be disclosed on the

Question

Quizplus · Accepted Answer

The allocation of net income and its impact on partners' equity balances should be disclosed on the statement of partners' equity, as this statement shows the changes in partners' equity over a period of time, including any net income or losses allocated to each partner. The income statement shows the total revenue and expenses for a period, but not the individual partners' shares of the net income. The balance sheet shows the partners' equity balances at a specific point in time, but not the changes in equity due to the allocation of net income. The work sheet is an internal document used in the preparation of financial statements, but it is not a financial statement in itself.

The Allocation of Net Income and Its Impact on Partners