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:

Frame Of Reference

The context, perspective, or background that influences how an individual perceives and interprets information.

Encoding

The process of converting ideas and thoughts into a communicable form, often involving language or symbols, in the context of communication.

Decoding

The process of interpreting and understanding messages or information received from others.

Transferring Thoughts

The process of conveying ideas or feelings from one mind to another through speech, writing, or another medium.