If no agreement exists in a partnership as to the allocation of income, what method is appropriate? a. receives equal allocations. b. receives an amount equal to their contributions. c. receives amounts based on their balance in their partnership capital accounts. d. receives an amount equal to the losses.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
If no agreement exists in a
|
a. receives equal allocations. |
||
|
b. receives an amount equal to their contributions. |
||
|
c. receives amounts based on their balance in their partnership capital accounts. |
||
|
d. receives an amount equal to the losses. |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
