In What Order Should the Tests to Determine a Partnership's

question 117

Multiple Choice

In what order should the tests to determine a partnership's year-end be applied?

• A)Majority interest taxable year; least aggregate deferral; principal partners test
• B)Principal partners test; majority interest taxable year; least aggregate deferral
• C)Principal partners test; least aggregate deferral; majority interest taxable year
• D)Majority interest taxable year; principal partners test; least aggregate deferral
• E)None of the choices are correct.

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Definitions:

Trial Balance

An accounting report that lists all the balances of each ledger account at a point in time to ensure that debits equal credits as part of the double-entry bookkeeping system.

Adjustments

Modifications made to financial statements to correct errors, account for omitted transactions, or bring the statements in line with Generally Accepted Accounting Principles (GAAP).

Long-term Investments

Assets held for an extended period with the intention of achieving capital gains, dividends, or interest income.

Classified Balance Sheet

A balance sheet that organizes assets and liabilities into subcategories for clarity.