RI Salaries to partners and interest on partners\' capital are not expenses of t

Question

RI Salaries to partners and interest on partners' capital are not expenses of the partnership but merely possible steps in the division of partnership net income (loss) Which of the following statements is correct? Interest on partners' capital are expenses of the partnership but not salaries to partners Salaries to partners are expenses of the partnership but not interest on partners' capital Salaries to partners and interest on partners' capital are expenses of the partnership Neither salaries to partners nor interest on partners' capital are expenses of the partnership

Explanation / Answer

Answer : D. Neither salaries to partners nor interest on partner's capital are expense of the partnership.

Explanation : these distribution are done after making the income statement and these are appropriation of profits.

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