How Is the Allocation of Partnership Profits Affected by Drawings

question 56

Multiple Choice

How is the allocation of partnership profits affected by drawings?

• A) Drawings must be deducted from partners' salaries.
• B) Drawings must be added back to profits before they are allocated.
• C) Drawings must be deducted from profits before they are allocated.
• D) Drawings only affect profit allocation if the partnership agreement provides for interest on drawings.