Which statement concerning drawings by partners in a partnership is correct?
A) Drawings are generally regarded as withdrawals of future profits.
B) Drawings are taken into account when calculating the final distribution of profit between the partners.
C) Interest is charged on drawings if the partnership agreement is silent on the matter.
D) Charging interest on drawings acts as an incentive to partners to withdraw money from the partnership.

Question

Quizplus · Accepted Answer

Drawings are generally regarded as withdrawals of future profits, as partners take money out of the business in anticipation of their share of profits.

Which Statement Concerning Drawings by Partners in a Partnership Is