Which of the Following Statements Is True About a Partnership

question 109

Multiple Choice

Which of the following statements is true about a partnership?

• A)One capital and one drawing account is used for each partnership.
• B)A separate capital account is used to record each partner's investment and that partner's designated share of the earnings.
• C)Partnerships are subject to separate business income taxes.
• D)The drawing account is closed to retained earnings at the end of the period.

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Definitions:

Goodwill

An intangible asset representing the value of a company's brand reputation, customer relationships, and overall favorability in the market.

Promotion Runs

A limited period during which a marketing campaign is active, offering special deals or discounts to boost sales or awareness.

Point of Difference

Unique attributes or benefits of a product or service that set it apart from competitors in the eyes of customers.

Sincerity

The quality of being open, truthful, and free from deceit or pretense.