The Primary Purpose of the Partnership Agreement Is to Document

question 98

True/False

The primary purpose of the partnership agreement is to document the various tax elections made by the partners regarding depreciation methods, treatment of research and experimental costs, calculation of the § 199 deduction, and the § 754 election.

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Definitions:

Cash Basis

An accounting method where revenues are recognized when received and expenses when paid.

Sales Adjusted

Adjustments made to sales figures for returns, allowances, or discounts.

Direct Method

A cost allocation method that assigns costs directly to cost objects without using any intermediate cost pools or allocations.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid, respectively.