Which of the Following Statements About a Partnership Is True

question 69

Multiple Choice

Which of the following statements about a partnership is true?

• A) A partnership is a taxpaying entity.
• B) Partners are taxed on distributions from a partnership.
• C) Partners are considered employees of the partnership.
• D) Partners are taxed on their allocable share of income whether it is distributed or not.

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Definitions:

Markdown Rate

The percentage decrease from the original price of an item to its new sale price.

Raisins

Dried grapes often used in cooking and baking or eaten as a snack.

Mark-up

The gap between the acquisition cost of a product or service and the price at which it's sold, calculated as a fraction of the initial cost.

Operating Profit

Income generated by the primary activities of a business before tax and interest deductions are taken into account.