Which of the Following Statements Is True About Distribution of Partners

question 57

Multiple Choice

Which of the following statements is true about distribution of partners earning?

• A)The interest on capital reduces net income on the income statement
• B)The salary component is reported as salary expense on the income statement.
• C)The interest and salary allocations have no effect on cash flows
• D)Owners' equity is reduced by the salary allocation.

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Definitions:

Functionalism

A perspective in sociology and psychology that emphasizes the importance of the roles that components of a society or mind serve in making the whole functional.

Behavior Analysis

A field of psychology that studies the effects of environmental influences on behavior, often through the use of the experimental analysis of behavior.

Functionalism

A school of psychology that focuses on the purpose and function of behavior and mental processes.

William James

An American philosopher and psychologist who is often referred to as the father of American psychology, known for his work in pragmatism and functionalism.