Which of the following would result in anincrease in Retained earning account? *Positive prior period adjustmentShare dividends declaredCash dividends declaredO Loss for the period1. The basis on which profits or losses are shared is a matter of agreement among the partners andmay not necessariiy be the same as their capital contribution ratio,II. Under the pure capital ratio plan of allocating profits, the partner who invested more capital willultimately shoulder bigger share of the loss.I. When a loss is closed into the partners' capital accounts, income summary is credited.IV. In the absence of any agreement, salary allowances shall be provided even when operationsyielded losses.O Two statements are falseThree statements are trueAll statements are TrueO All statements are False

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Which of the following would result in an increase in Retained earning account? * Positive prior period adjustment Share dividends declared Cash dividends declared O Loss for the period

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Which of the following would result in an
increase in Retained earning account? *
Positive prior period adjustment
Share dividends declared
Cash dividends declared
O Loss for the period
1. The basis on which profits or losses are shared is a matter of agreement among the partners and
may not necessariiy be the same as their capital contribution ratio,
II. Under the pure capital ratio plan of allocating profits, the partner who invested more capital will
ultimately shoulder bigger share of the loss.
I. When a loss is closed into the partners' capital accounts, income summary is credited.
IV. In the absence of any agreement, salary allowances shall be provided even when operations
yielded losses.
O Two statements are false
Three statements are true
All statements are True
O All statements are False

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