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:

Discontinued Operations

Components of a company's business that have been disposed of or are classified as held for sale, and whose financial results are separated from ongoing operations.

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, providing insight into a company's financial health.

Continuing Operations

The parts of a business expected to continue for the foreseeable future, excluding any discontinued operations.

Accounting Principle

A rule or guideline that directs the accounting practices and procedures by providing a framework within which accounts are maintained.