Which of the following statements is correct regarding partnerships?
A)Accounting for a partnership is similar to accounting for a sole proprietorship.
B)If the partnership assumes a liability related to an asset invested in the partnership,the asset is debited,the partner's capital account is credited and a liability account is credited.
C)It is necessary to maintain separate Capital and Withdrawals accounts for each partner.
D)All of these choices.

Question

Quizplus · Accepted Answer

A) The statement is correct as partnerships are not separate legal entities and the accounting treatment is similar to a sole proprietorship. 
B) The statement is also correct as the partnership assumes the liability related to the asset, and the accounting entries follow the same principle. 
C) The statement is also correct as each partner's capital and withdrawals need to be separately maintained to determine their share of profits/losses in the partnership. 
Therefore, all of the choices are correct.

Which of the Following Statements Is Correct Regarding Partnerships