What is the rule of offset? a. Loans from partners should be offset against their debit capital balances before they receive any cash distributions b. Loans to partners should be offset against their debit balances before they receive any cash distributions c. Receivables from partners should be debit against their capital balance before they receive any cash distributions d. Loans from partners should be offset against their credit capital balances before they receive any cash distributions
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.
What is the rule of offset?
a. Loans from partners should be offset against their debit capital balances before they receive any cash distributions
b. Loans to partners should be offset against their debit balances before they receive any cash distributions
c. Receivables from partners should be debit against their capital balance before they receive any cash distributions
d. Loans from partners should be offset against their credit capital balances before they receive any cash distributions
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