Question 1

The last step taken in liquidating a partnership is to:

Accepted Answer

A) sell the assets. 
B) divide profits on assets with partners. 
C) pay creditors. 
D) distribute the remaining cash according to partners' capital balances. 
A) sell the assets. 
B) divide profits on assets with partners. 
C) pay creditors. 
D) distribute the remaining cash according to partners' capital balances.

Question 2

Nathan Long is entering into a partnership with Terri.Nathan is investing $4,000 cash and equipment currently on Nathan's books at $10,000 and accumulated depreciation of $2,000.The equipment has a fair market value of $6,000.The entry to record Nathan's investment should be to:

Accepted Answer

A) debit Cash $4,000;debit Equipment 10,000;credit Accumulated Depreciation $2,000;credit Long,Capital $12,000. 
B) debit Cash $4,000;debit Equipment $6,000;credit Accumulated Depreciation $2,000;credit Long,Capital $8,000. 
C) debit Long,Capital $12,000;debit Accumulated Depreciation $2,000;credit Cash $4,000;credit Equipment $8,000. 
D) debit Cash $4,000;debit Equipment $6,000;credit Long,Capital $10,000. 
A) debit Cash $4,000;debit Equipment 10,000;credit Accumulated Depreciation $2,000;credit Long,Capital $12,000. 
B) debit Cash $4,000;debit Equipment $6,000;credit Accumulated Depreciation $2,000;credit Long,Capital $8,000. 
C) debit Long,Capital $12,000;debit Accumulated Depreciation $2,000;credit Cash $4,000;credit Equipment $8,000. 
D) debit Cash $4,000;debit Equipment $6,000;credit Long,Capital $10,000.

Question 3

A partnership is defined by the Generally Accepted Accounting Principles.

Accepted Answer

A) True 
 B)False

Question 4

Able partner withdrew cash from the business.
Debit ________ Credit ________

Accepted Answer

The answer of Able partner withdrew cash from the business.
Debit...

Question 5

"Limited life" in a partnership agreement means:

Accepted Answer

A) a partnership is limited in the amount of debt it is liable for in the course of the business. 
B) a partnership is limited to the amount of revenue it can earn. 
C) a partnership may be dissolved if the location of the business has changed. 
D) a partnership may be dissolved as the result of any change in the ownership. 
A) a partnership is limited in the amount of debt it is liable for in the course of the business. 
B) a partnership is limited to the amount of revenue it can earn. 
C) a partnership may be dissolved if the location of the business has changed. 
D) a partnership may be dissolved as the result of any change in the ownership.

Question 6

Which method of allocation of profits and losses is based on a percent of initial investment of the partners?

Accepted Answer

A) Salary allowance 
B) Salary expense 
C) Profit and loss ratio 
D) Interest allowance 
A) Salary allowance 
B) Salary expense 
C) Profit and loss ratio 
D) Interest allowance

Question 7

Which of the following is true of a partnership?

Accepted Answer

A) Actions of one partner are not binding on all the other partners. 
B) Each partner is individually liable for partnership debts. 
C) All of the owners always share income and losses equally. 
D) Both A and B are correct. 
A) Actions of one partner are not binding on all the other partners. 
B) Each partner is individually liable for partnership debts. 
C) All of the owners always share income and losses equally. 
D) Both A and B are correct.

Question 8

The Brad and Marcia partnership agree to admit Fred with a one-third interest for $10,000.Brad and Marcia's capital balances are $12,000,and $8,000,respectively,and they share profits and losses equally.The entry to admit Fred would include:

Accepted Answer

A) debit Cash $10,000;credit Fred,Capital $10,000. 
B) debit Cash $10,000;credit Brad,Capital $2500;debit Marcia,Capital $2500;credit Fred,Capital $5,000. 
C) debit Cash $10,000;credit Brad,Capital $5,000;credit Marcia Capital $5,000. 
D) debit Cash $10,000;debit Brad,Capital $2,500;credit Marcia,Capital $2,500;credit Fred,Capital $10,000. 
A) debit Cash $10,000;credit Fred,Capital $10,000. 
B) debit Cash $10,000;credit Brad,Capital $2500;debit Marcia,Capital $2500;credit Fred,Capital $5,000. 
C) debit Cash $10,000;credit Brad,Capital $5,000;credit Marcia Capital $5,000. 
D) debit Cash $10,000;debit Brad,Capital $2,500;credit Marcia,Capital $2,500;credit Fred,Capital $10,000.

Question 9

Closed Baker Partner's withdrawals.
Debit ________ Credit ________

Accepted Answer

The answer of Closed Baker Partner's withdrawals.
Debit ________ Credit ________...

Question 10

Closed the income summary to the partners' accounts with a net income.
Debit ________ Credit ________ & ________

Accepted Answer

Debit 14,C

Question 11

Partners are not required to report their share of partnership earnings on their personal tax return.

Accepted Answer

A) True 
 B)False

Question 12

A partnership can be formed with an oral agreement.

Accepted Answer

A) True 
 B)False

Question 13

The basis on which profits and losses are shared is governed by:

Accepted Answer

A) the SEC. 
B) the IRS. 
C) the partnership agreement. 
D) the partners,and must be shared equally. 
A) the SEC. 
B) the IRS. 
C) the partnership agreement. 
D) the partners,and must be shared equally.

Question 14

Partners Eric and Jeremy each have $3,000 capital balances and share income and losses in a 2:1 ratio for Eric and Jeremy,respectively.Cash equals $1,000,noncash assets are $10,000,and liabilities are $5,000.If all the noncash assets are sold for $4,000,and each partner is personally insolvent,Jeremy eventually will receive cash of:

Accepted Answer

A) $0. 
B) $1,000. 
C) $1,500. 
D) $2,000. 
A) $0. 
B) $1,000. 
C) $1,500. 
D) $2,000.

Question 15

A loss occurs when net income is not large enough to cover salary and interest allowances for the partners.

Accepted Answer

A) True 
 B)False

Question 16

Discuss the following characteristics of partnerships:
a)Limited life
b)Mutual agency
c)Unlimited liability

Accepted Answer

a)A partnership has a limited life.Whene

Question 17

Prepare the journal entry to record the partners' investment in the company.
Palmer invests $3,000 cash and equipment on his books at $6,000 with accumulated depreciation of $500.The fair market value of the equipment is $6,000.Evans is investing $6,000 cash and $1,000 accounts payable.

Accepted Answer

The answer of Prepare the journal entry to record the...

Question 18

Mary and Jeff entered into a partnership agreement.However,the agreement did not state how income and losses would be divided.The law states that income will be divided:

Accepted Answer

A) equally. 
B) according to investments. 
C) according to abilities. 
D) None of these answers is correct. 
A) equally. 
B) according to investments. 
C) according to abilities. 
D) None of these answers is correct.

Question 19

A bonus is paid to the old partners when:

Accepted Answer

A) the old partner believes the business is worth less than the amounts recorded in the accounting records. 
B) the equity of a partnership is worth more than what is recorded in the accounting records. 
C) the company's earnings records are less than expected. 
D) None of these answers is correct. 
A) the old partner believes the business is worth less than the amounts recorded in the accounting records. 
B) the equity of a partnership is worth more than what is recorded in the accounting records. 
C) the company's earnings records are less than expected. 
D) None of these answers is correct.

Question 20

When a partnership is liquidated,the assets are sold and the cash realized is applied first to the:

Accepted Answer

A) claims of creditors. 
B) partner with the largest investment. 
C) partners' equity accounts. 
D) partners according to their ownership interests. 
A) claims of creditors. 
B) partner with the largest investment. 
C) partners' equity accounts. 
D) partners according to their ownership interests.

Exam 17: Partnership

The last step taken in liquidating a partnership is to:

Nathan Long is entering into a partnership with Terri.Nathan is investing $4,000 cash and equipment currently on Nathan's books at $10,000 and accumulated depreciation of $2,000.The equipment has a fair market value of $6,000.The entry to record Nathan's investment should be to:

A partnership is defined by the Generally Accepted Accounting Principles.

Able partner withdrew cash from the business. Debit ________ Credit ________

"Limited life" in a partnership agreement means:

Which method of allocation of profits and losses is based on a percent of initial investment of the partners?

Which of the following is true of a partnership?

The Brad and Marcia partnership agree to admit Fred with a one-third interest for $10,000.Brad and Marcia's capital balances are $12,000,and $8,000,respectively,and they share profits and losses equally.The entry to admit Fred would include:

Closed Baker Partner's withdrawals. Debit ________ Credit ________

Closed the income summary to the partners' accounts with a net income. Debit ________ Credit ________ & ________

Partners are not required to report their share of partnership earnings on their personal tax return.

A partnership can be formed with an oral agreement.

The basis on which profits and losses are shared is governed by:

A loss occurs when net income is not large enough to cover salary and interest allowances for the partners.

Discuss the following characteristics of partnerships: a)Limited life b)Mutual agency c)Unlimited liability

Prepare the journal entry to record the partners' investment in the company. Palmer invests $3,000 cash and equipment on his books at $6,000 with accumulated depreciation of $500.The fair market value of the equipment is $6,000.Evans is investing $6,000 cash and $1,000 accounts payable.

Mary and Jeff entered into a partnership agreement.However,the agreement did not state how income and losses would be divided.The law states that income will be divided:

A bonus is paid to the old partners when:

When a partnership is liquidated,the assets are sold and the cash realized is applied first to the:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Able partner withdrew cash from the business. Debit Credit

Closed Baker Partner's withdrawals. Debit Credit

Closed the income summary to the partners' accounts with a net income. Debit Credit &