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15 April, 13:18

Which of the following equations best represents the reporting shown in a statement of partnership equity? a. Beginning Balance of Partner Capital - Capital Additions - Net Income - Partner Withdrawals = Ending Balance of Partner Capital b. Ending Balance of Partner Capital + Capital Additions - Partner Withdrawals = Partnership Net Income c. Beginning Balance of Partner Capital + Capital Additions + Net Income - Partner Withdrawals = Ending Balance of Partner Capital d. Partner Withdrawals - Net Income - Partner Deficiency = Ending Balance of Partner Capital

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  1. 15 April, 14:30
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    The correct answer is c. Beginning Balance of Partner Capital + Capital Additions + Net Income - Partner Withdrawals = Ending Balance of Partner Capital.

    Explanation:

    When a partnership is formed, all the partners invest capital as per their agreed share and that capital forms the Beginning balance of Partner Capital, after the partnership formation there is further capital investment by partners which should be added in the beginning balance. When the partnership business makes the profits, those profits or net income will be added to the capital account. When a partner withdraws some money, this is like he is extracting money from his investment in the business and share capital should reduce so the withdrawals should be subtracted. After all these actions we can have Ending Balance of Partner Capital.
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Home » Business » Which of the following equations best represents the reporting shown in a statement of partnership equity? a. Beginning Balance of Partner Capital - Capital Additions - Net Income - Partner Withdrawals = Ending Balance of Partner Capital b.
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