USA Please explain 4. Determining the capital account of a partner is relevant f

Question

USA Please explain

4. Determining the capital account of a partner is relevant for the following reasons: It is indicative of a partner's equity interest in the partnership with no necessary correlation to the partner's outside basis For partnership accounting purposes, a partner's capital account and outside basis are the same It is the same as the partnership's inside basis in the property contributed by the partner More than one of the above is correct None of the above is correct a. b. c. d. e.

Explanation / Answer

Answer is A ,ie partner capital account is indicative of the partners equity interest in the partnership as it reflects the partner capital contributed together with profit earned,salary & interest credited, drawings made by the partner and it has no relevance to the partner's own outside business

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