If a Partnership's Salary and Interest Allowances Are in Excess

question 116

Short Answer

If a partnership's salary and interest allowances are in excess of the net income, the entry to close Income Summary after the allowances are recorded will include a(n)------------to Income Summary.

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Definitions:

Negotiate

The process of discussing terms to reach a mutual agreement in transactions, contracts, or disputes.

Implied Warranty

A legal assumption that the goods sold meet certain quality standards, including that they are fit for the standard purposes for which such goods are sold.

Express Warranty

A clearly stated promise or guarantee regarding the condition or performance of a product or service.

Warranty Of Trade Usage

A guarantee implied in a transaction, based on the customary practices and standards in a particular industry.