Reference no: EM132759276

Problem 1: How is the allocation of partnership profits affected by drawings?

Select one:

a. Drawings must be deducted from profits before they are allocate D.

b. Drawings only affect profit allocation if the partnership agreement provides for interest on drawings.

c. Drawings must be added back to profits before they are allocateD.

d. Drawings must be deducted from partners' salaries.

Problem 2: Under the financial capital concept, profit exists:

Select one:

a. only when the entity's assets are higher than their liabilities.

b. only after the entity has set aside enough capital to maintain the operating capability of its assets.

c. only after the entity has maintained it capital, measured at the dollar value of equity, or the purchasing power of those dollars, at the beginning of the perioD.

d. only when the effects of inflation have been considereD.