The Most Appropriate Basis for Dividing Partnership Net Income When

question 206

Multiple Choice

The most appropriate basis for dividing partnership net income when the partners do not plan to take an active role in daily operations is

• A) on a fixed ratio.
• B) interest on capital balances and salaries to the partners.
• C) on a ratio based on average capital balances.
• D) salaries to the partners and the remainder on a fixed ratio.

---

Definitions:

Feedback Control

A management function that involves observing and adjusting processes based on comparing actual outcomes to planned outcomes to ensure objectives are met.

Concurrent Control

A management process that involves monitoring and adjusting ongoing activities and processes to ensure they meet established standards.

Corrective Action

Measures taken to identify, eliminate, and prevent recurrence of undesirable performances or non-conformities in a process or system.

Feedback Control

A process where outputs are monitored and used to make adjustments to inputs or processes to achieve desired outcomes.