Question 1

Partnership accounting is the same as accounting for:

Accepted Answer

A) A sole proprietorship. 
B) A corporation. 
C) A sole proprietorship,except that separate capital and withdrawal accounts are kept for each partner. 
D) An S corporation. 
E) A corporation,except that retained earnings is used to keep track of partners' withdrawals. 
A) A sole proprietorship. 
B) A corporation. 
C) A sole proprietorship,except that separate capital and withdrawal accounts are kept for each partner. 
D) An S corporation. 
E) A corporation,except that retained earnings is used to keep track of partners' withdrawals.

Question 2

Which of the following statements is true?

Accepted Answer

A) Partners are employees of the partnership. 
B) Salaries to partners are expenses on the partnership income statement. 
C) Salary allowances usually reflect the relative value of services provided by partners. 
D) Salary allowances are expenses. 
E) Interest allowances are expenses. 
A) Partners are employees of the partnership. 
B) Salaries to partners are expenses on the partnership income statement. 
C) Salary allowances usually reflect the relative value of services provided by partners. 
D) Salary allowances are expenses. 
E) Interest allowances are expenses.

Question 3

Wheadon,Davis,and Singer formed a partnership with Wheadon contributing $60,000,Davis contributing $50,000 and Singer contributing $40,000.Their partnership agreement called for the income (loss)division to be based on the ratio of capital investments.If the partnership had income of $75,000 for its first year of operation,what amount of income (rounded to the nearest thousand)would be credited to Wheadon's capital account?

Accepted Answer

A) $20,000. 
B) $25,000. 
C) $30,000. 
D) $40,000. 
E) $75,000. 
A) $20,000. 
B) $25,000. 
C) $30,000. 
D) $40,000. 
E) $75,000.

Question 4

Fontaine and Monroe are forming a partnership.Fontaine invests a building that has a market value of $250,000;the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property.Monroe invests $100,000 in cash and equipment that has a market value of $55,000.For the partnership,the amounts recorded for total assets and for total capital account are:

Accepted Answer

A) Total assets $405,000;total capital $330,000. 
B) Total assets $350,000;total capital $350,000. 
C) Total assets $350,000;total capital $275,000. 
D) Total assets $305,000;total capital $230,000. 
E) Total assets $405,000;total capital $305,000. 
A) Total assets $405,000;total capital $330,000. 
B) Total assets $350,000;total capital $350,000. 
C) Total assets $350,000;total capital $275,000. 
D) Total assets $305,000;total capital $230,000. 
E) Total assets $405,000;total capital $305,000.

Question 5

Partners can invest assets but not liabilities into a partnership.

Accepted Answer

A) True 
 B)False

Question 6

The life of a partnership is ____________________ in duration.

Accepted Answer

The answer of The life of a partnership is ____________________...

Question 7

A relatively new form of business organization that protects partners with limited liability,allows limited partners to assume an active management role,and is taxed as a partnership is a ______________________________.

Accepted Answer

limited li

Question 8

Jakobs,Penn,and Lundt are partners with beginning-of-year capital balances of $400,000,$320,000,and $160,000,respectively.The partners agreed to share income and loss as follows: Salary of $30,000 to Jakobs,$50,000 to Penn,and $36,000 to Lundt.An interest allowance of 8% on beginning-of-year capital balances.Any remaining balance is to be divided equally.If partnership net income for the year is $190,000,determine each partner's share and make the appropriate journal entry to close the Income Summary to the capital accounts.

Accepted Answer

The answer of Jakobs,Penn,and Lundt are partners with beginning-of-year capital...

Question 9

If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

Accepted Answer

A) C Corporation 
B) S Corporation 
C) Limited liability partnership 
D) Partnership 
E) Limited liability company 
A) C Corporation 
B) S Corporation 
C) Limited liability partnership 
D) Partnership 
E) Limited liability company

Question 10

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ________________________ partnership.

Accepted Answer

The answer of A partnership designed to protect innocent partners...

Question 11

Peters,Chong,and Aaron are dissolving their partnership.Their partnership agreement allocates each partner an equal share of all income and losses.The current period's ending capital account balances are Peters,$54,000;Chong,$42,000;and Aaron,$(2,000).After all assets are sold and liabilities are paid,there is $94,000 in cash to be distributed.Aaron is unable to pay the deficiency.The journal entry to record the distribution should be:

Accepted Answer

A) Debit Peters,Capital $54,000;debit Chong,Capital $40,000;credit Cash $94,000. 
B) Debit Peters,Capital $54,000;debit Chong,Capital $42,000;credit Cash $96,000. 
C) Debit Peters,Capital $53,000;debit Chong,Capital $41,000;credit Cash $94,000. 
D) Debit Cash $94,000,debit Aaron,Capital $2,000,credit Peters,Capital $54,000,credit Chong,Capital $42,000. 
E) Debit Cash $94,000;credit Peters,Capital $47,000;credit Chong,Capital $47,000. 
A) Debit Peters,Capital $54,000;debit Chong,Capital $40,000;credit Cash $94,000. 
B) Debit Peters,Capital $54,000;debit Chong,Capital $42,000;credit Cash $96,000. 
C) Debit Peters,Capital $53,000;debit Chong,Capital $41,000;credit Cash $94,000. 
D) Debit Cash $94,000,debit Aaron,Capital $2,000,credit Peters,Capital $54,000,credit Chong,Capital $42,000. 
E) Debit Cash $94,000;credit Peters,Capital $47,000;credit Chong,Capital $47,000.

Question 12

When a partner invests in a partnership,his/her capital account is __________ for the invested amount.

Accepted Answer

The answer of When a partner invests in a partnership,his/her...

Question 13

Bloom and Plant organize a partnership on January 1.Bloom's initial investment consists of $800 cash,$1,700 equipment and a $500 note payable reflecting a bank loan for the new business.Plant's initial investment is cash of $2,000.These amounts are the values agreed on by both partners.The journal entry to record Plant's investment is:

Accepted Answer

A) Debit Cash $1,500;debit Note Payable $500;credit Plant,Capital $2,000. 
B) Debit Cash $2,000;credit Note Payable $500,credit Plant,Capital $1,500. 
C) Debit Bloom,Capital $2,000;credit Cash $2,000. 
D) Debit Cash $2,500;credit Note Payable $500;credit Plant,Capital $2,500. 
E) Debit Cash $2,000;credit Plant,Capital $2,000. 
A) Debit Cash $1,500;debit Note Payable $500;credit Plant,Capital $2,000. 
B) Debit Cash $2,000;credit Note Payable $500,credit Plant,Capital $1,500. 
C) Debit Bloom,Capital $2,000;credit Cash $2,000. 
D) Debit Cash $2,500;credit Note Payable $500;credit Plant,Capital $2,500. 
E) Debit Cash $2,000;credit Plant,Capital $2,000.

Question 14

Wright,Bell,and Edison are partners and share income in a 2:5:3 ratio.The partnership's capital balances are as follows: Wright,$33,000,Bell $27,000 and Edison $40,000.Edison decides to withdraw from the partnership,and the partners agree not to revalue the assets upon Edison's retirement.The journal entry to record Edison's June 1 withdrawal from the partnership if Edison sells his interest to Whitney for $45,000 after the other two partners approve Whitney as partner is:

Accepted Answer

A) Debit Edison,Capital $45,000;credit Whitney,Capital $45,000. 
B) Debit Edison,Capital $40,000;credit Cash $40,000. 
C) Debit Edison,Capital $40,000;debit Wright,Capital $2,500;debit Bell,Capital $2,500;credit Whitney,Capital $45,000. 
D) Debit Edison,Capital $40,000;credit Whitney,Capital $40,000. 
E) Debit Edison,Capital $40,000;debit Cash $5,000;credit Whitney,Capital $45,000. 
A) Debit Edison,Capital $45,000;credit Whitney,Capital $45,000. 
B) Debit Edison,Capital $40,000;credit Cash $40,000. 
C) Debit Edison,Capital $40,000;debit Wright,Capital $2,500;debit Bell,Capital $2,500;credit Whitney,Capital $45,000. 
D) Debit Edison,Capital $40,000;credit Whitney,Capital $40,000. 
E) Debit Edison,Capital $40,000;debit Cash $5,000;credit Whitney,Capital $45,000.

Question 15

A partnership has a limited life.

Accepted Answer

A) True 
 B)False

Question 16

__________________ implies that each partner in a partnership can be called on to personally pay a partnership's debts.

Accepted Answer

The answer of __________________ implies that each partner in a...

Question 17

The following information is available on TGR Enterprises,a partnership,for the most recent fiscal year:   There are three partners in TGR Enterprises: Tracey,Gregory and Rodgers.At the end of the year,the partners' capital accounts were in the ratio of 2:1:2,respectively.Compute the ending capital balances of the three partners.

Accepted Answer

A) Tracey = $108,000;Gregory = $54,000;Rodgers = $108,000. 
B) Tracey = $90,000;Gregory = $90,000;Rodgers = $90,000. 
C) Tracey = $204,000;Gregory = $102,000;Rodgers = $204,000. 
D) Tracey = $84,000;Gregory = $102,000;Rodgers = $84,000. 
E) Tracey = $60,000;Gregory = $30,000;Rodgers = $60,000. 
A) Tracey = $108,000;Gregory = $54,000;Rodgers = $108,000. 
B) Tracey = $90,000;Gregory = $90,000;Rodgers = $90,000. 
C) Tracey = $204,000;Gregory = $102,000;Rodgers = $204,000. 
D) Tracey = $84,000;Gregory = $102,000;Rodgers = $84,000. 
E) Tracey = $60,000;Gregory = $30,000;Rodgers = $60,000.

Question 18

Peters and Chong are partners and share equally in income or loss.Peters' current capital balance is $140,000 and Chong's is $130,000.Peters and Chong agree to accept Aaron with a 30% interest in the partnership.Aaron invests $98,000 in the partnership.The amount credited to Aaron's capital account is:

Accepted Answer

A) $81,000. 
B) $102,600. 
C) $110,400. 
D) $98,000. 
E) $114,533. 
A) $81,000. 
B) $102,600. 
C) $110,400. 
D) $98,000. 
E) $114,533.

Question 19

Salary allowances are reported as salaries expense on a partnership income statement.

Accepted Answer

A) True 
 B)False

Question 20

Mace and Bowen are partners and share equally in income or loss.Mace's current capital balance is $135,000 and Bowen's is $120,000.Mace and Bowen agree to accept Kent with a 30% interest in the partnership.Kent invests $115,000 in the partnership.The amount credited to Kent's capital account is:

Accepted Answer

A) $111,000. 
B) $115,000. 
C) $92,500. 
D) $120,000. 
E) $119,000. 
A) $111,000. 
B) $115,000. 
C) $92,500. 
D) $120,000. 
E) $119,000.

Partnership accounting is the same as accounting for:

Which of the following statements is true?

Partners can invest assets but not liabilities into a partnership.

The life of a partnership is ____________________ in duration.

A relatively new form of business organization that protects partners with limited liability,allows limited partners to assume an active management role,and is taxed as a partnership is a ______________________________.

If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ________________________ partnership.

When a partner invests in a partnership,his/her capital account is __________ for the invested amount.

A partnership has a limited life.

__________________ implies that each partner in a partnership can be called on to personally pay a partnership's debts.

Salary allowances are reported as salaries expense on a partnership income statement.

Mace and Bowen are partners and share equally in income or loss.Mace's current capital balance is $135,000 and Bowen's is $120,000.Mace and Bowen agree to accept Kent with a 30% interest in the partnership.Kent invests $115,000 in the partnership.The amount credited to Kent's capital account is:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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Exam 12: Accounting for Partnerships

Partnership accounting is the same as accounting for:

Which of the following statements is true?

Partners can invest assets but not liabilities into a partnership.

The life of a partnership is ____________________ in duration.

A relatively new form of business organization that protects partners with limited liability,allows limited partners to assume an active management role,and is taxed as a partnership is a ______________________________.

If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ________________________ partnership.

When a partner invests in a partnership,his/her capital account is __________ for the invested amount.

A partnership has a limited life.

__________________ implies that each partner in a partnership can be called on to personally pay a partnership's debts.

Salary allowances are reported as salaries expense on a partnership income statement.

Mace and Bowen are partners and share equally in income or loss.Mace's current capital balance is $135,000 and Bowen's is $120,000.Mace and Bowen agree to accept Kent with a 30% interest in the partnership.Kent invests $115,000 in the partnership.The amount credited to Kent's capital account is:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

Filters