Keith and Jim formed a partnership business.The partnership incurs a net loss of $5000 and the partners agreed to share the losses equally.The entry to close the net loss will:
A)decrease Jim,capital by $5000.
B)decrease Keith,capital by $2500.
C)debit Income summary by $5000.
D)increase Jim,capital by $2500.

Question

Quizplus · Accepted Answer

The net loss of $5000 is shared equally between Keith and Jim, so each partner's capital account will decrease by $2500.

Keith and Jim Formed a Partnership Business