In the distribution of income, the net income is less than the salary and interest allowances granted; the remaining balance will be a negative amount that must be divided among the partners as though it were a loss.

Question

Quizplus · Accepted Answer

This statement is true. If the net income is less than the sum of salary and interest allowances, the remaining amount is considered a loss and it must be allocated among the partners.

In the Distribution of Income, the Net Income Is Less