Which of the Following Statements Best Describes Accounting for a Partnership

question 32

Multiple Choice

Which of the following statements best describes accounting for a partnership?

• A)A partnership may be a profit or a nonprofit entity.
• B)A partnership may use federal income tax rules to account for transactions in their journals and ledger accounts.
• C)A partnership's equity section contains both capital and retained earnings accounts.
• D)A partnership may only distribute money through a dividend payment.

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Definitions:

Differing Standards

Variations in rules, regulations, or norms across different areas, organizations, or systems.

Bailments

involve the temporary transfer of possession of personal property from one party to another, under a contract, for a specific purpose.

Rationale

The underlying reason or justification for something, such as a legal ruling, a business decision, or a philosophical stance.

Right of Lien

A legal right to keep possession of property belonging to another person until a debt owed by that person is discharged.