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.

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Definitions:

Relative Prices

The price of one good or service compared to another, often used to analyze choices and preferences in consumer behavior.

Society

A community of individuals living together in a more or less ordered community, sharing customs, laws, and organizations.

Money Demand

The desired holding of financial assets in the form of money; it is often associated with the level of liquidity preference.

Real Interest Rate

The interest rate adjusted for inflation, representing the true cost of borrowing or real yield on investment.