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Questions and Answers
What is the primary purpose of partnership final accounts?
What is the primary purpose of partnership final accounts?
- To calculate the individual partners' tax liabilities
- To ascertain the profit or loss of the partnership (correct)
- To assess the liquidity of the partnership
- To determine the market value of the partnership
In a partnership, what does the term 'guarantee' refer to?
In a partnership, what does the term 'guarantee' refer to?
- A legal document outlining the terms of the partnership agreement
- A promise by a partner to cover a certain amount of partnership debts in case of dissolution (correct)
- The assurance that the partnership will always be profitable
- The amount of initial capital contributed by each partner
What is the purpose of preparing a 'revaluation account' in partnership final accounts?
What is the purpose of preparing a 'revaluation account' in partnership final accounts?
- To calculate the goodwill of the partnership
- To adjust the values of assets and liabilities to their current market values (correct)
- To record the profits and losses from the sale of partnership assets
- To distribute the final profits among the partners
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