Which of the Following Is Not a Feature of the Variable

question 9

Multiple Choice

Which of the following is not a feature of the variable capital balances method (method 1) of accounting for partnership equity?

• A) Interest on capital is credited to the partner's retained earnings accounts.
• B) Each partner has one permanent capital account.
• C) Partner's drawings are closed to their capital accounts.
• D) The profit or loss distribution account is closed to the partner's capital accounts.

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Definitions:

Van Purchase

Refers to the acquisition of a van, categorized as a fixed asset, involving cash or credit transaction.

Financial Statements

Official documentation of a company, individual, or entity's financial transactions and status, usually comprising the income statement, balance sheet, and statement of cash flows.

Internal Accounting Staff

Employees within an organization responsible for overseeing and managing financial records and transactions.

Chief Executive Officer

The highest-ranking executive in a company, responsible for making major corporate decisions, overseeing the overall operations, and acting as the main point of communication between the board of directors and corporate operations.