It is possible to allocate income or loss to partners based solely on average capital balances.

Question

Quizplus · Accepted Answer

It is possible to allocate income or loss to partners based on average capital balances, as long as the partnership agreement allows for it. This method is commonly used in partnerships to distribute profits and losses based on each partner's contribution to the partnership's capital. However, it is important to note that other factors, such as the amount of work each partner contributes, may also be considered when allocating income or loss.

It Is Possible to Allocate Income or Loss to Partners