Question 1

Indicate the account(s) to be debited and credited to record the following transactions.
-John partner invested cash in the business.
Debit ________ Credit ________

Accepted Answer

A) Cash 
B) Accounts receivable 
C) Allowance for doubtful accounts 
D) Merchandise inventory 
E) Store supplies
F)Store equipment
G)Accumulated depreciation
H)Notes payable
I)Accounts payable
J)John Partner's, Capital
K)Joy Partner's, Capital
L)John Partner's, withdrawals
M)Joy Partner's, withdrawals
N)Income summary
O)Service revenue
P)Gain on realization
Q)Loss on realization 
A) Cash 
B) Accounts receivable 
C) Allowance for doubtful accounts 
D) Merchandise inventory 
E) Store supplies
F)Store equipment
G)Accumulated depreciation
H)Notes payable
I)Accounts payable
J)John Partner's, Capital
K)Joy Partner's, Capital
L)John Partner's, withdrawals
M)Joy Partner's, withdrawals
N)Income summary
O)Service revenue
P)Gain on realization
Q)Loss on realization

Question 2

A new partner was admitted, but the assets weren't revalued. A revaluation would have decreased the equity of the partner and partnership. This error would cause:

Accepted Answer

A)  the future periods' net income to be understated. 
B)  the future periods' net income to be overstated. 
C)  this period's end assets to be understated. 
D)  the new partner's capital to be overstated. 
A)  the future periods' net income to be understated. 
B)  the future periods' net income to be overstated. 
C)  this period's end assets to be understated. 
D)  the new partner's capital to be overstated.

Question 3

The accounting procedures are the same for sole proprietorships as for partnerships with the exception of:

Accepted Answer

A)  the asset section includes more than one cash account. 
B)  the liability section. 
C)  the revenue section. 
D)  the capital section has separate capital sections for each partner. 
A)  the asset section includes more than one cash account. 
B)  the liability section. 
C)  the revenue section. 
D)  the capital section has separate capital sections for each partner.

Question 4

Sol and Joe are partners sharing profits and losses in a 3:2 ratio for Sol and Joe, respectively. Their capital balances are $17,000 and $19,000, respectively. The partners agree to admit Dan for $16,000 for a 25% interest in the partnership. Joe's capital balance after admitting Dan is:

Accepted Answer

A)  $17,000. 
B)  $20,800. 
C)  $19,160. 
D)  $3,000. 
A)  $17,000. 
B)  $20,800. 
C)  $19,160. 
D)  $3,000.

Question 5

Bernstein is brought into the partnership. His capital is equal to his net assets that he brings to the partnership. He brings assets of $175,000 and liabilities of $32,000. His capital balance will be:

Accepted Answer

A)  $32,000. 
B)  $175,000. 
C)  $207,000. 
D)  $143,000. 
A)  $32,000. 
B)  $175,000. 
C)  $207,000. 
D)  $143,000.

Question 6

The Uniform Partnership Act defines a partnership as "an association of two or more persons to carry on as co-owners of a business for profit."

Accepted Answer

A) True 
 B)False

Question 7

A partnership admits a new partner. The new partner invests $75,000 in the business and receives a credit of $90,000 to his capital account. The difference of $15,000 is called a(n):

Accepted Answer

A)  admission fee. 
B)  partnership expense. 
C)  bonus. 
D)  illegal activity. 
A)  admission fee. 
B)  partnership expense. 
C)  bonus. 
D)  illegal activity.

Question 8

A Loss or Gain from Realization account is credited when the assets are sold at a loss during the liquidation process.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

a) A partnership has a limited life. Whe

Question 10

Partners Robert and Sally have $3,600 capital balances and share income and losses in a 2:1 ratio for Robert and Sally, respectively. Cash equals $1,200, noncash assets are $12,000, and liabilities are $5,500. If all the noncash assets are sold for $5,700, and each partner agrees to make up any capital deficits with personal cash contributions, Sally eventually will receive cash of:

Accepted Answer

A)  $0. 
B)  $1,200. 
C)  $1,500. 
D)  $2,100. 
A)  $0. 
B)  $1,200. 
C)  $1,500. 
D)  $2,100.

Question 11

When the equity of a partnership is less than amounts recorded in the accounting records, an incoming partner may have to pay a bonus.

Accepted Answer

A) True 
 B)False

Question 12

Applying the profit and loss ratio method, compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000 and the profit and loss ratio is 3:2. Net income was $70,000.

Accepted Answer

A)  Taylor, $14,000; Timmy, $56,000 
B)  Taylor, $35,000; Timmy, $35,000 
C)  Taylor, $42,000; Timmy, $28,000 
D)  None of these answers is correct. 
A)  Taylor, $14,000; Timmy, $56,000 
B)  Taylor, $35,000; Timmy, $35,000 
C)  Taylor, $42,000; Timmy, $28,000 
D)  None of these answers is correct.

Question 13

Indicate the account(s) to be debited and credited to record the following transactions.
-Closed the income summary, there is a net loss.
Debit ________ & ________ Credit ________

Accepted Answer

A) Cash 
B) Accounts receivable 
C) Allowance for doubtful accounts 
D) Merchandise inventory 
E) Store supplies
F)Store equipment
G)Accumulated depreciation
H)Notes payable
I)Accounts payable
J)John Partner's, Capital
K)Joy Partner's, Capital
L)John Partner's, withdrawals
M)Joy Partner's, withdrawals
N)Income summary
O)Service revenue
P)Gain on realization
Q)Loss on realization 
A) Cash 
B) Accounts receivable 
C) Allowance for doubtful accounts 
D) Merchandise inventory 
E) Store supplies
F)Store equipment
G)Accumulated depreciation
H)Notes payable
I)Accounts payable
J)John Partner's, Capital
K)Joy Partner's, Capital
L)John Partner's, withdrawals
M)Joy Partner's, withdrawals
N)Income summary
O)Service revenue
P)Gain on realization
Q)Loss on realization

Question 14

The profit or loss is required to be divided equally between the partners if otherwise not stated.

Accepted Answer

A) True 
 B)False

Question 15

An interest allowance is based on the beginning capital balance of each partner.

Accepted Answer

A) True 
 B)False

Question 16

Nathan Long is entering into a partnership with Terri. Nathan is investing $4,000 cash and equipment currently on Nathan's books at $16,000 and accumulated depreciation of $4,000. The equipment has a fair market value of $10,000. The entry to record Nathan's investment should be to:

Accepted Answer

A)  debit Cash $4,000; debit Equipment $16,000; credit Accumulated Depreciation $4,000; credit Long, Capital $16,000. 
B)  debit Cash $4,000; debit Equipment $10,000; credit Accumulated Depreciation $4,000; credit Long, Capital $10,000. 
C)  debit Long, Capital $12,000; debit Accumulated Depreciation $4,000; credit Cash $4,000; credit Equipment $12,000. 
D)  debit Cash $4,000; debit Equipment $10,000; credit Long, Capital $14,000. 
A)  debit Cash $4,000; debit Equipment $16,000; credit Accumulated Depreciation $4,000; credit Long, Capital $16,000. 
B)  debit Cash $4,000; debit Equipment $10,000; credit Accumulated Depreciation $4,000; credit Long, Capital $10,000. 
C)  debit Long, Capital $12,000; debit Accumulated Depreciation $4,000; credit Cash $4,000; credit Equipment $12,000. 
D)  debit Cash $4,000; debit Equipment $10,000; credit Long, Capital $14,000.

Question 17

Many associations, which include two or more persons that create a medical center or law firm could organize a:

Accepted Answer

A)  sole proprietorship. 
B)  corporation. 
C)  partnership. 
D)  Both B and C are correct. 
A)  sole proprietorship. 
B)  corporation. 
C)  partnership. 
D)  Both B and C are correct.

Question 18

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 19

When recording a bonus to a new partner, the new partner will:

Accepted Answer

A)  pay more than what the new partner's capital account will reflect. 
B)  pay the same as the other partners' capital accounts. 
C)  pay less than the new partner will receive in the capital account. 
D)  have no bonus recorded as a bonus cannot be paid to new partners. 
A)  pay more than what the new partner's capital account will reflect. 
B)  pay the same as the other partners' capital accounts. 
C)  pay less than the new partner will receive in the capital account. 
D)  have no bonus recorded as a bonus cannot be paid to new partners.

Question 20

Sherry and Jim 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.

Exam 17: Partnership

Indicate the account(s) to be debited and credited to record the following transactions. -John partner invested cash in the business. Debit ________ Credit ________

A new partner was admitted, but the assets weren't revalued. A revaluation would have decreased the equity of the partner and partnership. This error would cause:

The accounting procedures are the same for sole proprietorships as for partnerships with the exception of:

Sol and Joe are partners sharing profits and losses in a 3:2 ratio for Sol and Joe, respectively. Their capital balances are $17,000 and $19,000, respectively. The partners agree to admit Dan for $16,000 for a 25% interest in the partnership. Joe's capital balance after admitting Dan is:

Bernstein is brought into the partnership. His capital is equal to his net assets that he brings to the partnership. He brings assets of $175,000 and liabilities of $32,000. His capital balance will be:

The Uniform Partnership Act defines a partnership as "an association of two or more persons to carry on as co-owners of a business for profit."

A partnership admits a new partner. The new partner invests $75,000 in the business and receives a credit of $90,000 to his capital account. The difference of $15,000 is called a(n):

A Loss or Gain from Realization account is credited when the assets are sold at a loss during the liquidation process.

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

When the equity of a partnership is less than amounts recorded in the accounting records, an incoming partner may have to pay a bonus.

Applying the profit and loss ratio method, compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000 and the profit and loss ratio is 3:2. Net income was $70,000.

Indicate the account(s) to be debited and credited to record the following transactions. -Closed the income summary, there is a net loss. Debit ________ & ________ Credit ________

The profit or loss is required to be divided equally between the partners if otherwise not stated.

An interest allowance is based on the beginning capital balance of each partner.

Nathan Long is entering into a partnership with Terri. Nathan is investing $4,000 cash and equipment currently on Nathan's books at $16,000 and accumulated depreciation of $4,000. The equipment has a fair market value of $10,000. The entry to record Nathan's investment should be to:

Many associations, which include two or more persons that create a medical center or law firm could organize a:

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

When recording a bonus to a new partner, the new partner will:

Sherry and Jim 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:

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

Indicate the account(s) to be debited and credited to record the following transactions. -John partner invested cash in the business. Debit Credit

Indicate the account(s) to be debited and credited to record the following transactions. -Closed the income summary, there is a net loss. Debit & Credit