Which of the following statements is True?

Question

Quizplus · Accepted Answer

Salary allowances are typically determined based on the relative value of services provided by each partner to the partnership, and are therefore a reflection of the partners' ownership interests. While salaries to partners may be considered expenses on the partnership income statement, this is not always the case and will depend on the specific accounting methods used by the partnership. Partners are not employees of the partnership, and interest allowances are not expenses but rather a form of income.

Which of the Following Statements Is True