Which of the Following Best Describes the Use of Interest

question 15

Multiple Choice

Which of the following best describes the use of interest on invested capital as a means of allocating profits?

• A)If interest on invested capital is used, it must be used for all partners.
• B)Interest is allocated only if there is partnership net profit.
• C)Invested capital balances are never affected by drawings of the partnerships.
• D)The partnership agreement should clearly establish how invested capital is to be determined in the calculation of interest.

---

Definitions:

Software Developer

A professional who designs, tests, and maintains software programs and applications.

Personal Finance Software

Computer programs that help individuals manage their financial accounts and investments, track spending, and budget.

Total Cost

The complete expenditure incurred in the production, operation, or provision of goods or services, including both fixed and variable costs.

Software Package

A bundle of software applications or programs typically designed to perform a specific group of tasks or functions and sold as a single product.