Partnership Operations Flashcards
Profits and losses of the partnership are to be divided…
In accordance with the partners’ P&L agreement.
If NO agreement is made among the partners, profits and losses are to be divided according to…
Their original capital contributions.
If there is only a profit agreement between partners, then…
Losses shall be divided the same way profit will be divided.
Should the partners agree to divide losses only, profits shall be divided…
According to their original capital contributions.
Interest on partners’ capital account is ____ expense of the partnership.
Not an
Net income before allowances for salaries, interest and bonus.
NI = X + S + I + B
Net income before allowances for salaries and interest, but after deduction of the bonus.
NI = ( X + S + I ) - B
Net income after allowances for salaries and interest, but before bonus
NI = ( X + B ) - ( S + I )
Net income after allowances for salaries, interest, and bonus.
NI = X - ( S + I + B )
