Which of the following best describes the use of interest on invested capital as a means of allocating profits?
A) If interest on invested capital is used, it must be used for all partners.
B) Interest is allocated only if there is partnership net profit.
C) Invested capital balances are never affected by drawings of the partnerships.
D) The partnership agreement should clearly establish how invested capital is to be determined in the calculation of interest.
Correct Answer:
Verified
Q6: Which of the following is not an
Q7: Under the entity theory, a partnership is
A)viewed
Q8: The characteristic of a partnership where a
Q9: Which of the following is not a
Q10: Which of the following statements is true
Q12: A partnership has the following accounting amounts:
(1)Sales
Q13: The articles of partnership should include all
Q14: The characteristic of a partnership where specific
Q15: Partnership drawings are
A)usually maintained in a separate
Q16: Partner A began the year with $20,000
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