A Partnership Has the Following Accounting Amounts

question 34

Multiple Choice

A partnership has the following accounting amounts:
(1) Sales
$70,000
(2) Cost of Goods Sold = $40,000
(3) Operating Expenses = $10,000
(4) Salary allocations to partners = $13,000
(5) Interest paid to banks = $2,000
(6) Partners' withdrawals = $8,000
Partnership net income (loss) is ____.

• A)$20,000
• B)$18,000
• C)$5,000
• D)$(3,000)

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Definitions:

Reimbursement

The act of compensating someone for an expense they have incurred, often related to business costs or healthcare expenses.

Fringe Benefits

These are additional compensations provided to employees beyond their regular salaries, such as health insurance, car allowances, or retirement benefits.

Merit Pay Systems

Incentive programs that reward employees based on their performance and productivity.

Profit-Sharing Plans

A compensation strategy where employees receive a share of the company's profits, aligning their interests with the company's performance and fostering a team-oriented culture.