Net income in a partnership may not be distributed to the partners:
A)As a salary allowance.
B)As interest on beginning capital.
C)In a fixed ratio.
D)In the form of dividends.

Question

Quizplus · Accepted Answer

Net income in a partnership cannot be distributed in the form of dividends as partnerships are not corporations and do not issue stock. Dividends are typically paid to shareholders in corporations. Therefore, the other choices (A, B, and C) are possible ways to distribute net income in a partnership.

Net Income in a Partnership May Not Be Distributed to the Partners