Which of the following statements is true of partnerships?
A)If the partners have no partnership agreement specifying how to divide profits and losses,then they share profits and losses equally.
B)It is legally required to share the profit and losses equally,irrespective of the partnership agreement.
C)The stated ratio of profit sharing needs to be approved by the SEC.
D)The profit sharing is always based on each partner's capital balances and any losses will be shared equally.

Question

Quizplus · Accepted Answer

If there is no agreement specifying otherwise, partners in a partnership share profits and losses equally. However, it is highly recommended for partners to have a written partnership agreement specifying how profits and losses will be allocated.

Which of the Following Statements Is True of Partnerships