ACFAR IFA TOPIC 12 TRUE OR FALSE QUESTIONS AND CORRECT ANSWERS

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A partnership contract may provide for a special compensation in the form of bonus to the managing partner when the results of operations of the partnership are favorable. Correct Answer True Chang... es in the Partners' Equity between the beginning and the end of the reporting period reflect the increase or decrease in its net assets during the period. Correct Answer True When salary and interest allocations exceed profit, a loss has occurred Correct Answer False The salary, interest and stated ratio method of allocation cannot be applied when a loss has occurred Correct Answer False When a loss is closed into the partners' capital accounts, income summary is credited. Correct Answer True The basis on which profits and losses are shared is a matter of agreement among partners and may not necessarily be the same as their capital contribution ratio. Correct Answer True [Show More]

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