Keith and Jim Formed a Partnership Business

question 57

Multiple Choice

Keith and Jim formed a partnership business. The partnership incurs a net loss of $6,000 and the partners agreed to share the losses equally. The entry to close the net loss will:

• A)debit Income Summary by $6,000.
• B)decrease Keith, Capital by $3,000.
• C)increase Jim, Capital by $3,000.
• D)decrease Jim, Capital by $6,000.

---

Definitions:

Stock Price

The monetary value at which a company’s stock is traded on the market, influenced by factors like company performance and market conditions.

Premium

The amount by which the price of a bond or other security exceeds its principal amount or face value.

American Put Option

An American put option is a financial derivative that gives the holder the right, but not the obligation, to sell a specified quantity of an asset at a predetermined price before or on the option's expiration date.

Underlying Asset

The fundamental asset upon which financial derivatives and instruments, such as options and futures, are structured and valued.