A Sharing of Profits and Losses Is the Only Requirement

question 14

True/False

A sharing of profits and losses is the only requirement of a partnership.

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Definitions:

Ending Capital

Beginning Capital + Additional Investments + Net Income – Withdrawals = Ending Capital. Or: Beginning Capital + Additional Investments – Net Loss – Withdrawals = Ending Capital.

Worksheet

A document used by accountants to gather information from financial statements, adjust and close entries, and prepare financial statements.

Plant, Property

Plant, Property, often followed by and Equipment (PP&E), represents long-term assets owned by a company, used in its operations.

Equipment

Tangible assets used in operations, such as machinery or office equipment, not intended for sale.