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Which of the following equations best represents the reporting shown in a statement of partnership equity? a) Beginning Balance of Partner Capital + Capital Additions + Net Income Partner Withdrawals = Ending Balance of Partner Capital
Which of the following equations best represents the reporting shown in a statement of partnership equity?
a) Beginning Balance of Partner Capital + Capital Additions + Net Income Partner Withdrawals = Ending Balance of Partner Capital.
b) Partner Withdrawals - Net Income - Partner Deficiency = Ending Balance of Partner Capital.
c) Beginning Balance of Partner Capital - Capital Additions - Net Income - Partner Withdrawals = Ending Balance of Partner Capital.
d) Ending Balance of Partner Capital + Capital Additions - Partner Withdrawals = Partnership Net Income.
Expert Solution
The correct answer is option (d)
The equation in option (d) best represents the reporting shown in a statement of partnership equity.
Explanation: When the sum of the ending Balance of Partner Capital and Capital Additions is decreased by Partner Withdrawals it gives the Partnership Net Income, as per the accounting equation.
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