Accounting for a partnership is similar to accounting for a sole trader, except that:
A) tax must be calculated by the partnership on each partner's share of profit.
B) each partner's share of equity must be recorded separately.
C) each partner has limited liability.
D) most partnerships are not reporting entities.

Question

Quizplus · Accepted Answer

In a partnership, each partner's share of equity is recorded separately in the accounting records to reflect their individual investment and share of profits or losses, distinguishing it from sole trader accounting where only a single owner's equity is considered.

Accounting for a Partnership Is Similar to Accounting for a Sole