Which of the Following Statements Is True of Profits and Losses

question 87

Multiple Choice

Which of the following statements is true of profits and losses in a general partnership?

• A) The proportion of profit shared is equal to the general partner's initial investment.
• B) Losses are shared in the same proportion as profits by all general partners.
• C) The general partner who proposed the idea of the business gets most profit.
• D) The proportion of investment governs only the proportion of loss shared and not profit obtained.

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Definitions:

Work in Process Inventory

Goods in manufacturing that are partially completed, situated between raw materials and finished products.

Direct Material Cost

The cost of raw materials that can be directly attributed to the goods being produced.

Predetermined Overhead Rate

A rate used in costing to allocate indirect costs to products or services based on a predetermined formula.

Job Order Costing

An accounting method used to track costs and evaluate the expenses associated with specific jobs or batches.