Which of the Following Statements Is True About a Partnership

question 65

Multiple Choice

Which of the following statements is true about a partnership?

• A)One capital and one drawing account is used for each partnership.
• B)The capital account is used to record each partner's investment and that partner's designated share of the earnings.
• C)Partnerships are subject to separate business income taxes.
• D)The drawing account is closed to retained earnings at the end of the perioD.The capital account in a partnership keeps track of each partner's capital balance and is affected by partner investments and withdrawals as well as net income.

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