Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

Financial Accounting

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

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Multiple Choice

If partnerships retain their earnings, when are partners taxed on those earnings?

Only if the partnership is dissolved

When the partnership files its tax return

In the year the earnings are earned by the partnership, regardless of distribution

Only when the earnings are actually distributed to the partners

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Verified step by step guidance

Understand the concept of partnership taxation: In a partnership, earnings are taxed to the partners in the year they are earned by the partnership, regardless of whether the earnings are distributed or retained.

Review the principle of pass-through taxation: Partnerships are pass-through entities, meaning the income earned by the partnership is reported on the individual partners' tax returns and taxed at their personal income tax rates.

Clarify the timing of taxation: Partners are taxed on their share of the partnership's earnings in the year the earnings are earned, not when the partnership files its tax return or when the earnings are distributed.

Eliminate incorrect options: Analyze the provided options and rule out incorrect answers, such as taxation only upon dissolution or only upon distribution, as these do not align with the principle of pass-through taxation.

Conclude with the correct understanding: The correct answer is that partners are taxed in the year the earnings are earned by the partnership, regardless of distribution, as this reflects the tax treatment of partnership income.