Post Utme Madonna University 2021 Accounting Question 1

Practice objective / multiple choice question 1 from the 2021 Post Utme Madonna University Accounting examination.

Post Utme Madonna University 2021 Accounting Objective / Multiple Choice
Question 1 POST_UTME_MADONNA_UNIVERSITY • 2021 • ACCOUNTING • objective

In a partnership account, the capital of a partner who withdraws cash from the business is reduced by the amount withdrawn. However, if the partner's capital is reduced below the minimum capital required by the partnership agreement, the deficiency must be made up by the partner. Which of the following is the correct treatment of the deficiency?

Answer Options

A. The deficiency is treated as a loan from the partner to the partnership.
B. The deficiency is treated as a capital contribution from the partner to the partnership.
Correct Answer C. The deficiency is treated as a loss to the partner and is deducted from the partner's capital.
D. The deficiency is treated as a loan from the partnership to the partner.
Correct Answer
C
Correct Option:
The deficiency is treated as a loss to the partner and is deducted from the partner's capital.

About This Question

This is Post Utme Madonna University 2021 Accounting Question 1. It is one of the objective questions from the 2021 Post Utme Madonna University Accounting examination.

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