Sandra and Timmy own a partnership that provides rental equipment for parties and special occasions.Which of the following is true about the way Sandra and Timmy would handle company profits?
A) Automatically split the profits,with 50 percent for Sandra and 50 percent for Timmy.
B) They would do nothing because partnerships require that profits remain in the business.
C) Divide the profits according to each person's investment in the business.
D) Distribute the profits according to the terms of the partnership agreement.
E) Split the profits according to how many hours each person worked.

Question

Quizplus · Accepted Answer

Partnerships typically have a partnership agreement that outlines how profits will be distributed among the partners. Therefore, Sandra and Timmy would distribute the profits according to the terms of their partnership agreement.

Sandra and Timmy Own a Partnership That Provides Rental Equipment