Question 1

The financial statement prepared to summarize the changes in partner's capital accounts is the __________________________.

Accepted Answer

Statement

Question 2

Patsy Garrison owns and operates a bakery called Patsy's Pastries.Her postclosing trial balance on December 31,2016,is provided below.Garrison plans to enter into a partnership with Erika Noreen,effective January 1,2017.Profits and losses will be shared equally.Garrison will transfer all assets and liabilities of her store to the partnership,after revaluation.Noreen will invest cash equal to Garrison's investment after revaluation.The agreed values are: Accounts Receivable (net),$15,000;Merchandise Inventory,$54,000;and Store Equipment,$16,000.The partnership will operate under the name Baker's Delight.Record each partner's investment on page 1 of a general journal.Omit descriptions.
Prepare a balance sheet for Baker's Delight just after the investments.

Accepted Answer

The answer of Patsy Garrison owns and operates a bakery...

Question 3

At the end of each fiscal year,cash is distributed to each partner in accordance with the profit distribution included in the partnership agreement and is reported on the partner's individual tax return.

Accepted Answer

A) True 
 B)False

Question 4

Upon withdrawal,the withdrawing partner(s)may receive less than their capital account balances.

Accepted Answer

A) True 
 B)False

Question 5

Finch and Gerhardt are partners.Finch's capital balance is $100,000 and Gerhardt's is $140,000.They agreed to share equally in profits and losses.Both partners agree to accept a third investor,Harrison as a new partner with a 25% interest in the partnership.Harrison intends to invest $90,000 in cash.The bonus that is granted to Finch and Gerhardt equals:

Accepted Answer

A)  $3,750 each. 
B)  $5,000 each. 
C)  $10,000 each. 
D)  $15,500 each.
  
A)  $3,750 each. 
B)  $5,000 each. 
C)  $10,000 each. 
D)  $15,500 each.

Question 6

Some partners,known as limited partners,may not be personally liable for the debts of the partnership.

Accepted Answer

A) True 
 B)False

Question 7

A partnership has a(n)____________________ life because it ends with the death or withdrawal of any partner.

Accepted Answer

The answer of A partnership has a(n)____________________ life because it...

Question 8

The amount that each partner withdraws from a partnership

Accepted Answer

A)  cannot exceed the net income reported by the partnership. 
B)  should be specified in the partnership agreement. 
C)  is the base on which federal income taxes are levied on the partnership income. 
D)  is usually determined by the amount of the net income. 
A)  cannot exceed the net income reported by the partnership. 
B)  should be specified in the partnership agreement. 
C)  is the base on which federal income taxes are levied on the partnership income. 
D)  is usually determined by the amount of the net income.

Question 9

The general ledger of a partnership will

Accepted Answer

A)  not contain a separate drawing account for each partner. 
B)  contain one capital account that reflects the total equity of all partners. 
C)  not contain a capital account or accounts. 
D)  contain a separate capital account for each partner. 
A)  not contain a separate drawing account for each partner. 
B)  contain one capital account that reflects the total equity of all partners. 
C)  not contain a capital account or accounts. 
D)  contain a separate capital account for each partner.

Question 10

The partners' salary and interest allowances are recorded in

Accepted Answer

A)  expense accounts. 
B)  drawing accounts. 
C)  capital accounts. 
D)  liability accounts. 
A)  expense accounts. 
B)  drawing accounts. 
C)  capital accounts. 
D)  liability accounts.

Question 11

The financial statement that shows the division of profits and losses among partners is the _______________.

Accepted Answer

The answer of The financial statement that shows the division...

Question 12

A gain or loss on revaluation of assets should be allocated to the partners according to the balances of their capital accounts.

Accepted Answer

A) True 
 B)False

Question 13

Catherine Vollick and Danica Hubbard are partners.To expand the expertise of their business,they have agreed to admit Kyle Simon to the partnership on January 1,2016.The capital account balances on January 1,2016,after revaluation of assets,are Vollick,$80,000,and Hubbard,$60,000.Net income or net loss is shared equally.On page 8 of a general journal,record the admission of Simon to the partnership on January 1,2016,assuming that Vollick sells one-half of her interest to Simon for $50,000 in cash.Omit the description.

Accepted Answer

The answer of Catherine Vollick and Danica Hubbard are partners.To...

Question 14

Which of the following statements is correct?

Accepted Answer

A)  If a new partner invests cash in an existing partnership and a bonus is given to a new partner,the old partners' capital accounts increase. 
B)  When a new partner is admitted to an existing partnership upon an investment of cash,the new partner's capital account may appropriately be debited for an amount other than the amount of cash invested. 
C)  The partnership agreement should include steps to follow if a partner withdraws from the partnership. 
D)  When a new partner is admitted to an existing partnership upon an investment of cash,the new partner's capital account will always equal the amount of cash the new partner invested. 
A)  If a new partner invests cash in an existing partnership and a bonus is given to a new partner,the old partners' capital accounts increase. 
B)  When a new partner is admitted to an existing partnership upon an investment of cash,the new partner's capital account may appropriately be debited for an amount other than the amount of cash invested. 
C)  The partnership agreement should include steps to follow if a partner withdraws from the partnership. 
D)  When a new partner is admitted to an existing partnership upon an investment of cash,the new partner's capital account will always equal the amount of cash the new partner invested.

Question 15

If an individual invests more cash for an interest in an existing partnership than the book value of his or her interest,the old partners are said to receive a(n)___________________.

Accepted Answer

The answer of If an individual invests more cash for...

Question 16

If an individual invests more cash for an interest in an existing partnership than the book value of his or her interests,an entry is made to debit

Accepted Answer

A)  Cash and credit the capital account of each existing partner. 
B)  Cash and credit the drawing account of each existing partner. 
C)  Cash and credit the Income Summary account for the excess. 
D)  each existing partner's capital account and credit Cash. 
A)  Cash and credit the capital account of each existing partner. 
B)  Cash and credit the drawing account of each existing partner. 
C)  Cash and credit the Income Summary account for the excess. 
D)  each existing partner's capital account and credit Cash.

Question 17

Bryce and Kendall are partners.The partnership agreement provides for salary allowances of $52,000 for Bryce and $44,000 for Kendall and for interest of 10 percent on each partner's invested capital at the beginning of the year.The balance of any remaining profits or losses is to be divided 40 percent to Bryce and 60 percent to Kendall.On January 1,2016,the capital account balances were Bryce,$150,000,and Kendall,$190,000.Net income for the year was $144,000.
1.On page 22 of a general journal,record the following entries on December 31,2016.Omit descriptions.
A)Record the salary allowances for the year.
B)Record the interest allowances for the year.
C)Record the division of the balance of net income.
D)Close the drawing accounts into the capital accounts.Assume that the partners have withdrawn the full amount of their salaries.
2.Prepare a schedule showing the division of net income to the partners as it would appear on the income statement for 2016.

Accepted Answer

The answer of Bryce and Kendall are partners.The partnership agreement...

Question 18

A dissolution has little impact on the business activities of the partnership whereas a liquidation occurs when the business ceases to exist.

Accepted Answer

A) True 
 B)False

Question 19

If the withdrawing partner receives more cash than their capital account balances,the excess is debited to the capital accounts of the remaining partners according to their income and loss ratios specified in the partnership agreement.

Accepted Answer

A) True 
 B)False

Question 20

When the owner of a sole proprietorship accepts a partner,the assets of the proprietorship

Accepted Answer

A)  must be transferred to the partnership at the values reflected in the financial records of the proprietorship. 
B)  must be converted to cash and used to pay any debts of the proprietorship,with excess cash available for investment in the new partnership. 
C)  cannot be invested in the new partnership. 
D)  may be adjusted to reflect current values before being transferred to the partnership. 
A)  must be transferred to the partnership at the values reflected in the financial records of the proprietorship. 
B)  must be converted to cash and used to pay any debts of the proprietorship,with excess cash available for investment in the new partnership. 
C)  cannot be invested in the new partnership. 
D)  may be adjusted to reflect current values before being transferred to the partnership.

Exam 19: Accounting for Partnerships

The financial statement prepared to summarize the changes in partner's capital accounts is the __________________________.

At the end of each fiscal year,cash is distributed to each partner in accordance with the profit distribution included in the partnership agreement and is reported on the partner's individual tax return.

Upon withdrawal,the withdrawing partner(s)may receive less than their capital account balances.

Some partners,known as limited partners,may not be personally liable for the debts of the partnership.

A partnership has a(n)____________________ life because it ends with the death or withdrawal of any partner.

The amount that each partner withdraws from a partnership

The general ledger of a partnership will

The partners' salary and interest allowances are recorded in

The financial statement that shows the division of profits and losses among partners is the _______________.

A gain or loss on revaluation of assets should be allocated to the partners according to the balances of their capital accounts.

Which of the following statements is correct?

If an individual invests more cash for an interest in an existing partnership than the book value of his or her interest,the old partners are said to receive a(n)___________________.

If an individual invests more cash for an interest in an existing partnership than the book value of his or her interests,an entry is made to debit

A dissolution has little impact on the business activities of the partnership whereas a liquidation occurs when the business ceases to exist.

If the withdrawing partner receives more cash than their capital account balances,the excess is debited to the capital accounts of the remaining partners according to their income and loss ratios specified in the partnership agreement.

When the owner of a sole proprietorship accepts a partner,the assets of the proprietorship

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analyses

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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