Question 1

The different partners are taxed on:

Accepted Answer

A)  the gross revenue of the partnership. 
B)  the amount they withdraw from the partnership. 
C)  the total amount of the net profit of the partnership. 
D)  the partners' share of the net profit of the partnership. 
A)  the gross revenue of the partnership. 
B)  the amount they withdraw from the partnership. 
C)  the total amount of the net profit of the partnership. 
D)  the partners' share of the net profit of the partnership.

Question 2

After calculating salary and interest allowances, it is necessary to determine whether net income will cover these expenses.

Accepted Answer

A) True 
 B)False

Question 3

Jan and Bill have average capital balances of $35,000 and $20,000, respectively. The partners have agreed to allow $20,000 salary allowances. The partners will share income and losses in a 1:2 ratio for Jan and Bill, respectively. How much will each partner's capital account change if net income is $130,000?

Accepted Answer

The answer of Jan and Bill have average capital balances...

Question 4

The characteristic that means if a partnership is unable to pay its obligations all general partners are individually liable is known as:

Accepted Answer

A)  limited life. 
B)  unlimited liability. 
C)  limited liability. 
D)  mutual agreement. 
A)  limited life. 
B)  unlimited liability. 
C)  limited liability. 
D)  mutual agreement.

Question 5

When a partnership is worth more than the amounts recorded, an incoming partner may:

Accepted Answer

A)  be required to pay a bonus to the other partners. 
B)  pay a smaller amount as an initial investment. 
C)  have to pay the same as other partners. 
D)  None of these answers is correct. 
A)  be required to pay a bonus to the other partners. 
B)  pay a smaller amount as an initial investment. 
C)  have to pay the same as other partners. 
D)  None of these answers is correct.

Question 6

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.

Question 7

Partnerships are subject to federal income tax.

Accepted Answer

A) True 
 B)False

Question 8

What is the closing entry to allocate net income $210,000 to Eric, Von, and Derek? Their respective capital balances are $69,000, $69,000, and $92,000. Net income is shared in a ratio of their capital balances.

Accepted Answer

A)  Debit Income Summary $210,000; credit Eric, Capital $63,000; credit Von, Capital $63,000; credit Derek, Capital $84,000 
B)  Debit Income Summary $210,000; credit Eric, Capital $70,000; credit Von, Capital $70,000; credit Derek, Capital $70,000 
C)  Debit Salary Expense $210,000; credit Salaries Payable $210,000 
D)  Net income cannot be allocated. 
A)  Debit Income Summary $210,000; credit Eric, Capital $63,000; credit Von, Capital $63,000; credit Derek, Capital $84,000 
B)  Debit Income Summary $210,000; credit Eric, Capital $70,000; credit Von, Capital $70,000; credit Derek, Capital $70,000 
C)  Debit Salary Expense $210,000; credit Salaries Payable $210,000 
D)  Net income cannot be allocated.

Question 9

Indicate the account(s) to be debited and credited to record the following transactions.
-The business paid an account.
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 10

Nathan invests $2,800 for 10% interest in a partnership that has total capital of $20,000 after admitting Nathan. Which of the following is true?

Accepted Answer

A)  Nathan's capital is $2,000. 
B)  The original partners received a bonus of $280. 
C)  Nathan received a bonus of $280. 
D)  The original partners' capital in the business was $22,800 before admitting Nathan. 
A)  Nathan's capital is $2,000. 
B)  The original partners received a bonus of $280. 
C)  Nathan received a bonus of $280. 
D)  The original partners' capital in the business was $22,800 before admitting Nathan.

Question 11

A bonus paid by an incoming partner to the old partners is shared:

Accepted Answer

A)  equally. 
B)  by the salary method. 
C)  on the basis of profit and loss ratio. 
D)  by the interest method. 
A)  equally. 
B)  by the salary method. 
C)  on the basis of profit and loss ratio. 
D)  by the interest method.

Question 12

Articles of partnership:

Accepted Answer

A)  are required to form a partnership by federal law. 
B)  are a formal written agreement that states the partners' relationship. 
C)  may be an oral agreement. 
D)  Both B and C are correct. 
A)  are required to form a partnership by federal law. 
B)  are a formal written agreement that states the partners' relationship. 
C)  may be an oral agreement. 
D)  Both B and C are correct.

Question 13

The agreed-upon ratio for dividing earnings or losses of a partnership is called:

Accepted Answer

A)  interest allowance. 
B)  salary allowance. 
C)  profit and loss ratio. 
D)  profit and loss allowance. 
A)  interest allowance. 
B)  salary allowance. 
C)  profit and loss ratio. 
D)  profit and loss allowance.

Question 14

The statement of partners' equity reveals each partner's ownership percentage of the firm's capital.

Accepted Answer

A) True 
 B)False

Question 15

A partnership can be formed with an oral agreement.

Accepted Answer

A) True 
 B)False

Question 16

The last entry to liquidate a partnership would probably include:

Accepted Answer

A)  debit to Capital (for each partner); credit to Cash. 
B)  debit to Cash; debit or credit to Loss or Gain from Realization; credit to individual assets sold. 
C)  debit to individual assets sold; credit to Cash. 
D)  None of the above 
A)  debit to Capital (for each partner); credit to Cash. 
B)  debit to Cash; debit or credit to Loss or Gain from Realization; credit to individual assets sold. 
C)  debit to individual assets sold; credit to Cash. 
D)  None of the above

Question 17

Tricia and Jennifer formed a partnership. Tricia invested $16,000 cash; Jennifer invested $12,000 cash, equipment with a fair value of $15,000, and $5,000 accounts payable. The proper entry to record this is:

Accepted Answer

A)  debit Cash $28,000; debit Equipment $15,000; credit Accounts Payable $5,000; credit Tricia's Capital $16,000; and credit Jennifer's Capital $22,000. 
B)  debit Cash $28,000; debit Equipment $10,000; debit Accounts Payable $5,000; credit Tricia's Capital $21,500; and credit Jennifer's Capital $21,500. 
C)  debit Cash $28,000; debit Equipment $15,000; credit Tricia's Capital $21,500; and credit Jennifer's Capital $21,500. 
D)  debit Cash $23,000; debit Equipment $15,000; credit Tricia's Capital $16,000; and credit Jennifer's Capital $22,000. 
A)  debit Cash $28,000; debit Equipment $15,000; credit Accounts Payable $5,000; credit Tricia's Capital $16,000; and credit Jennifer's Capital $22,000. 
B)  debit Cash $28,000; debit Equipment $10,000; debit Accounts Payable $5,000; credit Tricia's Capital $21,500; and credit Jennifer's Capital $21,500. 
C)  debit Cash $28,000; debit Equipment $15,000; credit Tricia's Capital $21,500; and credit Jennifer's Capital $21,500. 
D)  debit Cash $23,000; debit Equipment $15,000; credit Tricia's Capital $16,000; and credit Jennifer's Capital $22,000.

Question 18

Bill pays Steve $13,000 for his $9,000 interest in a partnership. On the partnership books:

Accepted Answer

A)  Bill will have capital of $9,000. 
B)  Bill will have capital of $13,000. 
C)  Bill will have capital of $22,000. 
D)  None of these answers is correct. 
A)  Bill will have capital of $9,000. 
B)  Bill will have capital of $13,000. 
C)  Bill will have capital of $22,000. 
D)  None of these answers is correct.

Question 19

Jones and James' partnership capital balances are $65,000 and $85,000, respectively. They share profits and losses in a 1:3 ratio for Jones and James, respectively. Johnson is admitted to the partnership and invests $55,000 for a one-fourth interest, with a bonus to the old partners. Prepare the journal entry to admit Johnson to the partnership.

Accepted Answer

@#IMG-DLM& Total capital = $68,000 + $85

Question 20

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.

Exam 17: Partnership

The different partners are taxed on:

After calculating salary and interest allowances, it is necessary to determine whether net income will cover these expenses.

The characteristic that means if a partnership is unable to pay its obligations all general partners are individually liable is known as:

When a partnership is worth more than the amounts recorded, an incoming partner may:

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

Partnerships are subject to federal income tax.

What is the closing entry to allocate net income $210,000 to Eric, Von, and Derek? Their respective capital balances are $69,000, $69,000, and $92,000. Net income is shared in a ratio of their capital balances.

Indicate the account(s) to be debited and credited to record the following transactions. -The business paid an account. Debit ________ Credit ________

Nathan invests $2,800 for 10% interest in a partnership that has total capital of $20,000 after admitting Nathan. Which of the following is true?

A bonus paid by an incoming partner to the old partners is shared:

Articles of partnership:

The agreed-upon ratio for dividing earnings or losses of a partnership is called:

The statement of partners' equity reveals each partner's ownership percentage of the firm's capital.

A partnership can be formed with an oral agreement.

The last entry to liquidate a partnership would probably include:

Tricia and Jennifer formed a partnership. Tricia invested $16,000 cash; Jennifer invested $12,000 cash, equipment with a fair value of $15,000, and $5,000 accounts payable. The proper entry to record this is:

Bill pays Steve $13,000 for his $9,000 interest in a partnership. On the partnership books:

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

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. -The business paid an account. Debit Credit