There Are Some Liabilities, Such as Income Tax Payable, for Which

question 155

Multiple Choice

There are some liabilities, such as income tax payable, for which the amounts must be estimated. Failure to estimate these amounts and record them would be a violation of the

• A) convention of conservation.
• B) concept of historical cost.
• C) practice of consistency.
• D) matching principle.

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Definitions:

Partners' Personal Assets

The personal property or financial resources owned by partners in a business, distinct from the assets owned by the partnership itself.

Total Capital

The sum of a company's debt and equity, representing the total funds that a company can use for business operations or investments.

Net Assets

The total assets of a company or organization minus its total liabilities, indicating its financial health.

Partnership

A sanctioned business model involving a partnership of two or more persons who equally divide management duties and profits.