BRW Partnership Reported Gross Income from Operations of $60,000, Interest

question 112

True/False

BRW Partnership reported gross income from operations of $60,000, interest income of $3,000, rental expense of $20,000, and a charitable contribution of $6,000. On its Schedule K, the partnership reports ordinary business income of $40,000, and separately stated interest income ($3,000) and charitable contributions ($6,000).

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Definitions:

Operating Assets

Assets that are used in the daily operations of a business to generate revenue, such as machinery, buildings, and equipment.

Controllable Margin

The portion of income that remains after deducting controllable expenses, indicating the earning performance that management can influence.

Controllable Costs

Expenses that a manager or business has the power to influence or change in the short term.

Managerial Responsibility

The obligation of managers to make decisions and take actions that maximize the value and effectiveness of an organization.