Asked by Jennifer Vandiver on Apr 26, 2024
Verified
If the net income of a partnership is less than the total of the allowances provided by the partnership agreement, the difference must be divided among the partners in the income-sharing ratio.
Net Income
The profit remaining after all costs, expenses, and taxes have been subtracted from total revenue.
Allowances
Funds set aside or discounts offered to account for various factors such as potential returns, defective goods, or customer satisfaction initiatives.
Income-Sharing Ratio
An agreed upon proportion used to distribute profits or losses among partners in a partnership.
- Understand the distribution of partnership income among partners.
Verified Answer
Learning Objectives
- Understand the distribution of partnership income among partners.
Related questions
Rita Has a Beginning Basis in a Partnership of $43,000 ...
Soledad and Winston Are Partners Who Share Income in the ...
A Partner Had the Following Items Reported on a Partnership ...
An Interest Allowance in Sharing Partnership Net Income (Or Net ...
Raul Contributes the Following Assets to a Partnership for a ...