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.