The two types of allowances that may be considered before the division of profits and losses are:
A) interest and salary allowances.
B) interest and bonus allowances.
C) salary and bonus allowances.
D) bonus and liquidation allowances.

Question

Quizplus · Accepted Answer

Interest and salary allowances are the two types of allowances that may be considered before the division of profits and losses in a partnership. Interest allowances are given on the capital invested by the partners, and salary allowances are compensation for the services provided by the partners to the partnership.

The Two Types of Allowances That May Be Considered Before