Which of the Following Statements Is Correct with Regards to Closing

question 19

Multiple Choice

Which of the following statements is correct with regards to closing the accounts of a partnership?

• A) Partners are owners; therefore partner's salaries must be treated as drawings.
• B) Partnership profit is credited to each partner's capital account according to the profit sharing agreement.
• C) Partnership accounts use a retained earnings account instead of a profit or loss summary account.
• D) A partnership loss for the period is carried forward and is not transferred to the partner's capital accounts.

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Definitions:

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The process by which a company offers shares of its stock to the general public for the first time, often referred to as an Initial Public Offering (IPO).

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The process by which one company takes over the control of another company, either through the purchase of its shares or assets.

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A large, specially equipped indoor or outdoor venue designed for hosting sports events and other large-scale entertainment or gatherings.