Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 16 - No. 44)
What is the impact of a partner's salary on the profit and loss of the partnership?
It is a distribution of profits and does not affect net income.
It reduces the partnership's net income before allocation to the partners.
It increases the partnership's net income.
It is not reflected in the profit and loss statement.
Explanation
Partner salaries are an expense that is taken before the profit and loss of the partnership.
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