Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 17 - No. 48)
How does a partnership's profit or loss get allocated among partners at the end of the accounting period?
It is divided equally regardless of partner contribution.
Based on a predetermined profit-sharing ratio outlined in the partnership agreement.
Based on the partners' investments
The partnership agreement dictates the partner's salaries.
Explanation
Profit or loss is allocated according to the agreed-upon terms in the partnership agreement.
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