Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 18 - No. 41)
How does a partner's salary affect the allocation of profits in a partnership?
It increases the partnership's net profit.
It decreases the partnership's net profit before profit sharing.
It has no impact on the partnership's net profit.
It directly increases the partner's capital account.
Explanation
Partner salaries are considered an expense. Therefore they affect the net profit before profit sharing.
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