After completion of the closing entries, the profit distribution account in a partnership always has a:
A) nil balance.
B) debit balance.
C) credit balance.
D) negative balance.

Question

Quizplus · Accepted Answer

After closing all revenue and expense accounts, the net profit or loss is transferred to the partners' capital accounts. Therefore, the profit distribution account in a partnership ends up with a nil balance, as all profits have been distributed or allocated to the partners.

After Completion of the Closing Entries, the Profit Distribution Account