Income Can Be Allocated to Partners Based Solely on Average

question 91

True/False

Income can be allocated to partners based solely on average capital balances.

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Definitions:

Residual Income

Residual income is the profit remaining after deducting all required costs of capital from operating income.

Margin

Typically refers to the difference between the selling price of a product and its cost, used to measure profitability.

Turnover

The rate at which inventory or assets are sold and replaced or the rate at which employees are replaced in a business.

Residual Income

The amount of income that an investment or project generates above the minimum rate of return.