When Danny Withdrew from John, Daniel, Harry, and Danny, LLP

question 3

Multiple Choice

When Danny withdrew from John, Daniel, Harry, and Danny, LLP, he was paid $80,000, although his capital account balance was only $60,000. The four partners shared net income and losses equally, and no revaluation will take place. The journal entry to record the effect on John's capital due to Danny's withdrawal would include:

• A) $6,667 debit to John, Capital.
• B) $6,667 credit to John, Capital.
• C) $20,000 debit to John, Capital.
• D) $5,000 debit to John, Capital.
• E) $5,000 credit to John, Capital.

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Definitions:

Long-Term Memory

A type of memory capable of storing information for extended periods, often throughout an individual's life.

Nodes

Points or intersections within a network where connections meet, often used to refer to individual elements or devices within a communication network.

Base-Rate Information

Statistical information about the frequency of events or characteristics within a given population, used in decision-making processes.

Illusory Correlation

The false perception of a relationship between two variables or events, often due to a cognitive bias or mistaken assumption.