The Salary and Interest Allowances in a Partnership Profit-Sharing Agreement

question 72

Multiple Choice

The salary and interest allowances in a partnership profit-sharing agreement can best be described as

• A) expenses of the business that are deducted from revenue in the determination of net income.
• B) amounts on which each partner will not have to pay income tax.
• C) a means of distributing net income in relation to the services provided and the capital invested by each partner.
• D) a legal requirement in order for a partnership to be formed.

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