The Text Refers to Two Methods of Accounting for Equity

question 24

Multiple Choice

The text refers to two methods of accounting for equity in a partnership, method 1 and method 2; these are:

• A) interest and no interest methods.
• B) cash and credit capital methods.
• C) variable and fixed capital account methods.
• D) equal and proportionate profit sharing methods.

---

Definitions:

Deposit

A sum of money placed in an account or with a party as a part of a financial transaction, often securing a service or as a part of a purchase agreement.

W-2 Form

An annual tax form used in the United States to report wages paid to employees and the taxes withheld from them.

Net Pay

The amount of money that an employee takes home after all deductions, such as taxes and retirement contributions, have been subtracted from their gross pay.

FICA-OASDI

A U.S. payroll tax that funds the Social Security and Medicare programs, officially known as the Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance.