Alex, Brad, and Carl are partners. The profit and rule sharing rule between them is 4:3:3 in the alphabetical order. The partnership incurs a net loss of $100,000. Before preparing the closing journal entry the:
A)Income Summary account will have a debit balance of $100,000.
B)Alex, Capital account will have a debit balance of $40,000.
C)Alex, Capital account will have a credit balance of $40,000.
D)Carl, Capital account will have a debit balance of $30,000.

Question

Quizplus · Accepted Answer

The Income Summary account will have a debit balance of $100,000 because it reflects the net loss before it is allocated to the partners' capital accounts.

Alex, Brad, and Carl Are Partners