Question

If the partnership agreement specifies salaries to partners, interest on partners' capital, and the remainder on a fixed ratio, and partnership net income is not sufficient to cover both salaries and interest:__________.

a. only salaries are allocated to the partners.
b. only interest is allocated to the partners.
c. the entire net income is shared on a fixed ratio.
d. both salaries and interest are allocated to the partners.

Answer 1

d. both salaries and interest are allocated to the partners

Step-by-step explanation: