Farrell and Jimmy Enter into a Partnership Agreement on May

question 44

Multiple Choice

Farrell and Jimmy enter into a partnership agreement on May 1,2018.Farrell contributes $50,000 and Jimmy contributes $150,000 as their capital contributions.They decide to share profits and losses in the ratio of their respective capital account balances.The net loss for the year ended December 31,2018 is $40,000.The capital account of Farrell should be ________ with his share of the loss.

• A) debited
• B) credited
• C) increased
• D) halved

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Definitions:

Foreign Corrupt Practices Act

A U.S. law that prohibits American companies and their employees from bribing foreign officials to gain a business advantage.

President Jimmy Carter

Former President of the United States from 1977 to 1981, known for his focus on human rights, diplomacy, and environmental issues.

Foreign Government Officials

Individuals who hold positions of authority or service in the government of a country other than one's own.

Business

The practice of engaging in commerce, trade, or services with the intention of generating profit and economic growth.