Keith and Jim Formed a Partnership Business

question 76

Multiple Choice

Keith and Jim formed a partnership business.The partnership incurs a net loss of $5000 and the partners agreed to share the losses equally.The entry to close the net loss will:

• A)decrease Jim,capital by $5000.
• B)decrease Keith,capital by $2500.
• C)debit Income summary by $5000.
• D)increase Jim,capital by $2500.

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Definitions:

Economies of Scale

The cost advantage that arises with increased output of a product, as fixed costs are spread over more units of production.

Price Competition

A market situation where sellers compete primarily on the price of their goods or services, often leading to lower prices for consumers.

Oligopolistic Industries

Markets or industries dominated by a few large firms, where each firm has some market power and their decisions affect each other.

Celler-Kefauver Act

A United States antitrust law passed in 1950 aimed at preventing anticompetitive mergers and acquisitions that might reduce competition.