If Partners Devote Their Time and Services to Their Partnership

question 70

True/False

If partners devote their time and services to their partnership, their salaries are expenses on the income statement.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, labor, and both variable and fixed overhead—as part of the cost of a finished product.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overheads - in the cost of a product.

Variable Costing Income (VCI)

An accounting method that includes only variable costs—costs that change with production level—in calculating net income.

Full Costing Income (FCI)

A method of accounting that allocates all fixed and variable costs to products, operations or projects to determine profitability.