Answered: To compensate the partners for the…

To compensate the partners for the difference in the capital contributions, this is incorporated in the profit or loss sharing

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3Q: Can a partnership assume liabilities as part of one of the partners contributions?

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Question

To compensate the partners for the difference in the capital contributions, this is incorporated in the profit or loss sharing

salaries

bonus

interest

interest and bonus

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When a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income sharing ratio. Why?
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. The share of loss of partners will appear: A. On the debit side of the profit and loss appropriation accountB. On the credit side of the profit and loss appropriation accountC. On the credit side of the partners’ capital accountD. Neither credit side nor debit side of the profit and loss appropriation account
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