Select the Entry That Correctly Records the Receipt by Speedy

question 38

Multiple Choice

Select the entry that correctly records the receipt by Speedy Window Cleaning of $900 in cash for window cleaning services provided. Ignore GST.

• A) DR bank $900; CR income earned $900
• B) DR income earned $900; CR bank $900
• C) DR bank $900; CR debtors $900
• D) DR equity $900; CR income earned $900

Know how the admission of new partners or the retirement of existing partners affects partnership accounting and legal standing.

Understand the concept of partner investment valuations, including the impact of assets' fair value versus book value.

Distinguish between the types of partners and their respective liabilities and roles within a partnership.

Acknowledge the tax and informational reporting requirements of partnerships.

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Definitions:

Large Number

A numeric value that is significantly above average or expected in size or magnitude.

Porter's Five Forces

A framework analyzing a business's competitive environment based on five key forces: competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entrants.

Zero-Sum Game

A situation in which one participant's gains or losses are exactly balanced by the losses or gains of the other participants.

Profitability Expense

A cost incurred by a business that is considered when calculating its profitability, often relating to the operational, production, or administrative aspects of the company.