The Partnership of Bher and Dhillips Reports Net Income of $120000

question 21

Multiple Choice

The partnership of Bher and Dhillips reports net income of $120000. The partners share equally in income and losses. The entry to record the partners' share of net income will include a

• A) credit to Income Summary for $120000.
• B) credit to Bher Capital for $60000.
• C) debit to Dhillips Capital for $60000.
• D) credit to Dhillips Drawing for $60000.

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Definitions:

Net Income

This is the total profit of a company after all expenses, taxes, and dividends have been subtracted from total revenue.

Voting Stock

Stocks that provide the holder with voting privileges regarding corporate policies and electing the board members.

Cash Dividend

A distribution of a company's earnings to its shareholders in the form of cash.

Passive Investment

An investment strategy involving minimal buying and selling actions, typically focused on long-term gains and avoiding frequent trading.