Which of the Following Statements Regarding Partnerships Is TRUE

question 5

Multiple Choice

Which of the following statements regarding partnerships is TRUE?

• A) Partnership income is taxed in the partnership.
• B) Partnership losses cannot be offset against the partners' other income.
• C) Partnership income is included in a partner's income in the year of disbursement.
• D) Partnerships may earn business income, property income, and capital gains.

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Definitions:

Long-Term Liabilities

Obligations that are not due or payable for a long time, usually for more than a year.

Net Sales

The total revenue from sales reduced by returns, allowances, and discounts.

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting overhead, payroll, taxation, and interest payments.

Cost of Goods Sold

The total direct costs incurred in producing goods which are sold, including materials and labor.