After Completion of the Closing Entries, the Profit Distribution Account

question 16

Multiple Choice

After completion of the closing entries, the profit distribution account in a partnership always has a:

• A) nil balance.
• B) debit balance.
• C) credit balance.
• D) negative balance.

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Definitions:

Cash Balance

The amount of cash on hand at any given time in a company's financial accounts.

End of the Period

A term referring to the conclusion of a specific accounting period, at which financial statements are prepared.

Statement of Cash Flows

A financial report that details the amount of cash and cash equivalents entering and leaving a company.

Long-term Assets

Assets intended for use over an extended period, typically exceeding one year, such as buildings, machinery, or land.