McCartney Consulting Group Is a Management-Consulting Firm That Provides Its

question 293

Multiple Choice

McCartney Consulting Group is a management-consulting firm that provides its expertise to businesses that employ its services. Since it does not hold an inventory of goods or produce any goods itself:

• A) its revenue will equal its net income.
• B) its gross profit could be identical to its net revenue.
• C) it is unlikely to have any operating expenses.
• D) its balance sheet will not record any current assets.

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Definitions:

Disposal

The act of getting rid of something, especially by throwing it away or by selling or giving it to someone.

Guaranteed Payment

Payments made to a partnership's partner that are guaranteed without regard to the partnership's income.

Partnership Basis

The amount invested in a partnership by each partner, including cash, property, and the partner's share of partnership debt.

Ordinary Income

Income earned from providing services or the sale of goods, taxed at standard rates.