Identify Which of the Following Statements Is True

question 76

Multiple Choice

Identify which of the following statements is true.

• A) It may be necessary for the partnership to capitalize a partner's guaranteed payment.
• B) A partner who performs services for a partnership is usually not considered an employee of the partnership.
• C) Guaranteed payments are ordinary income to the recipient.
• D) All of the above are true.

---

Definitions:

"A bird in hand"

A principle implying that it is better to have a certain, smaller benefit now than a possibility of a greater benefit later, often used in dividend policy discussions.

Future Earnings

Projected or anticipated profits a company expects to earn in future periods, often used for valuation purposes.

Short-Term Benefit

Refers to immediate rewards or perks provided to employees, including bonuses, sick leave, and temporary incentives.

Long-Term Benefit

Advantages or positive outcomes that accrue over an extended period, often associated with investments or strategic business decisions.