Question

68. Which of the following statements is false? Partners may contribute additional capital to the partnership in the form of cash and other assets Withdrawals of cash by the partners are called "drawings." The partnership income statement includes revenues and expenses but not salary paid to partners A) B) C) D) All of the above are true 69. Which of the following statements about the allocation of partnership profit or loss is false? A) Partnership agreements sometimes allow for a salary payment as part of the profit allocation process, computed as a fixed payment or variable rate based on some measure of output. Salary payment is allocated to the partner and the net profit after this payment is B) allocated to the partners based on a profit-sharing ratio. Uniform Partnership Act of 1997 states that a partner is not entitled to remuneration for services performed for the partnership. All of the above are true C) D) 70. Which of the following statements about interest on the Capital Account is false? A) B) C) D) Interest paid on Capital Account balances is not treated like interest on debt for accounting purposes. Interest paid on Capital Account balances is treated as a form of profit allocation like salary. The journal entry to record the payment of interest on Capital Account balances involves a debit to interest expense. The interest rate is specified in the Partnership Agreement. 71. Which of the following statements is false regarding the allocation of profit to partners? A) The allocation of remaining profit to the partners is based on a sharing ratio that is described in the Partnership Agreement. The Partnership Agreement can provide for different sharing ratios in the event of a profit or a loss. B) The profit sharing ratio does not have to conform to the partners' respective Capital Account balances All of the above are true. C) D)

Answer 1

68. Answer is option D given all sentences are true

69. Answer is option D.gicen all sentences are true

70. Answer is option A(interest on capital account balances is treated like interest on debt)

71. Answer is option B (ratio remains the same)