Alex,Brad and Carl Are Partners

question 22

Multiple Choice

Alex,Brad and Carl are partners.The profit and rule sharing rule between them is 5:2:2 in the alphabetical order.The partnership incurs a net loss of $100,000.Before preparing the closing journal entry the:

• A)Alex,capital account will have a credit balance of $55,556.
• B)Alex,capital account will have a debit balance of $55,556.
• C)Income summary account will have a debit balance of $100,000.
• D)Carl,capital account will have a debit balance of $22,222.

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Definitions:

Inflation

The speed at which the overall price level of goods and services increases, diminishing buying power.

Monetarists

Economists who believe that variations in the money supply have major influences on national output in the short run and the price level over longer periods, as well as on inflation.

Money Supply

The overall quantity of currency and other liquid instruments circulating in an economy at a particular time.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.