Which of the following statements is true?
A) Salaries to partners are expenses on the partnership income statement.
B) Interest allowances are expenses.
C) Salary allowances are expenses.
D) Partners are employees of the partnership.
E) Salary allowances usually reflect the relative value of services provided by partners.

Question

Quizplus · Accepted Answer

Salary allowances typically reflect the relative value of services provided by partners, so this statement is true. Salaries to partners are not considered expenses on the partnership income statement because partners are not employees. Interest allowances can be considered expenses, but this statement is not always true. Therefore, options A, B, C, and D are inaccurate.

Which of the Following Statements Is True