Asked by Muhammad Altaf on Jul 30, 2024
Verified
The basis on which profits and losses are shared is governed by:
A) the SEC.
B) the IRS.
C) the partnership agreement.
D) the partners and must be shared equally.
Partnership Agreement
A legal document that outlines the terms and conditions governing the relationship between partners in a business partnership.
- Determine and elucidate the objective and fundamental components of partnership agreements.
- Absorb the basic rules surrounding how profits or losses are shared among partners, incorporating a comprehension of multiple allocation methods, notably the profit and loss ratio.
Verified Answer
DC
Dayrine CabrejaAug 02, 2024
Final Answer :
C
Explanation :
The basis on which profits and losses are shared among partners in a partnership is governed by the partnership agreement. This agreement outlines how profits and losses will be divided among the partners, which can vary greatly depending on the terms set forth by the partners themselves.
Learning Objectives
- Determine and elucidate the objective and fundamental components of partnership agreements.
- Absorb the basic rules surrounding how profits or losses are shared among partners, incorporating a comprehension of multiple allocation methods, notably the profit and loss ratio.