Which of the Following Would Be the Most Convincing Evidence

question 60

Multiple Choice

Which of the following would be the most convincing evidence of a partnership?

• A) An agreement to share in the management of a business.
• B) Agreements to share gross returns.
• C) An agreement to share profits and losses.
• D) An agreement to pay a firm manager a percentage of the profits for his salary.

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Definitions:

Journal Entries

Records of financial transactions in the double-entry bookkeeping system, noting debits and credits for each transaction.

Work in Process

Inventory representing goods that are in the production process but not yet completed.

Finished Goods

Merchandise ready for retail, having gone through the manufacturing stage.

Raw Materials

Basic substances in their natural, modified, or semi-processed states, used as inputs to a production process for manufacturing goods.