Farrell and Jimmy Enter into a Partnership Agreement on May

question 58

Multiple Choice

Farrell and Jimmy enter into a partnership agreement on May 1,2017.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 31,2017 is $40,000.The capital account of Farrell should be ________ with the amount of loss.

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

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Definitions:

Chemical

A simple or compound substance used in chemical processes.

Rabies

Rabies is a viral disease that causes acute encephalitis (inflammation of the brain) in warm-blooded animals and is usually transmitted through the bite of an infected animal.

Acute Viral Disease

A disease of sudden onset and short duration caused by viruses, such as the flu or common cold.

Nervous System

The complex network of nerve cells and fibers that transmits nerve impulses between parts of the body, enabling responses to internal and external stimuli.