Question 1

When two proprietors decide to combine their businesses and form a partnership, GAAP usually requires that noncash assets be taken over at their:

Accepted Answer

A)  residual value on the date of the formation of the partnership. 
B)  book value on the date of the partnership. 
C)  fair market value on the date of the partnership. 
D)  historical cost on the date of the partnership. 
A)  residual value on the date of the formation of the partnership. 
B)  book value on the date of the partnership. 
C)  fair market value on the date of the partnership. 
D)  historical cost on the date of the partnership.

Question 2

After all liabilities have been paid, the remaining assets are distributed based on equal share to partners.

Accepted Answer

A) True 
 B)False

Question 3

When a partnership is liquidated, the journal entry to pay the claims of creditors would include:

Accepted Answer

A)  a debit to partners' equity accounts. 
B)  a debit to each individual creditor. 
C)  a credit to cash. 
D)  Both B and C 
A)  a debit to partners' equity accounts. 
B)  a debit to each individual creditor. 
C)  a credit to cash. 
D)  Both B and C

Question 4

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 5

The partnership of Brandon and Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio, respectively. Before liquidation, their balance sheet balances are as follows:   a) If the Other Assets are sold for $10,000, how much capital will each partner receive have before paying liabilities and distributing the remaining assets?
b) If the Other Assets are sold for $7,000, how much capital will each partner have before paying liabilities and distributing remaining assets?

Accepted Answer

The answer of The partnership of Brandon and Ryan is...

Question 6

Partners Randy and Mary each have $3,000 capital balances and share income and losses in a 2:1 ratio for Randy and Mary, respectively. Cash equals $5,000, noncash assets total $13,000, and liabilities are $5,000. If all the noncash assets are sold for $10,000, Mary's capital account will: (Round your answer to the nearest dollar.)

Accepted Answer

A)  increase by $5,333. 
B)  decrease by $1,000. 
C)  decrease by $2,000. 
D)  increase by $2,667. 
A)  increase by $5,333. 
B)  decrease by $1,000. 
C)  decrease by $2,000. 
D)  increase by $2,667.

Question 7

Mary sold Jill her equity in the Mary and Jill partnership for $31,000. If both Mary and Jill had a $16,000 capital balance, the entry to record this transaction would be to:

Accepted Answer

A)  debit Cash $31,000; credit Jill, Capital $31,000. 
B)  debit Mary, Capital $16,000; credit Jill, Capital $16,000. 
C)  debit Cash $16,000; credit Mary, Capital $16,000. 
D)  debit Jill, Capital $16,000; credit Mary, Capital $16,000. 
A)  debit Cash $31,000; credit Jill, Capital $31,000. 
B)  debit Mary, Capital $16,000; credit Jill, Capital $16,000. 
C)  debit Cash $16,000; credit Mary, Capital $16,000. 
D)  debit Jill, Capital $16,000; credit Mary, Capital $16,000.

Question 8

Partners are required to report their share of partnership earnings on their personal tax return.

Accepted Answer

A) True 
 B)False

Question 9

Jan and Ben are partners, with beginning capital balances of $70,000 and $62,000 respectively. During the year, Jan withdrew $12,000 and Ben withdrew $23,000. The year's net income of $48,000 was distributed $19,000 to Jan and $29,000 to Ben. Calculate the ending balances in the capital accounts.

Accepted Answer

A)  Jan, $58,000; Ben, $39,000 
B)  Jan, $77,000; Ben, $68,000 
C)  Jan, $90,000; Ben, $90,000 
D)  Jan, $70,000; Ben, $62,000 
A)  Jan, $58,000; Ben, $39,000 
B)  Jan, $77,000; Ben, $68,000 
C)  Jan, $90,000; Ben, $90,000 
D)  Jan, $70,000; Ben, $62,000

Question 10

Allan and Rick are partners who share profits and losses in the ratio of 3:2 for Allan and Rick, respectively. They have capital balances of $40,000 and $47,000, respectively. If Tammy invests $32,000 for one-third interest, Tammy's capital balance will be: (Round your answer to the nearest dollar.)

Accepted Answer

A)  $39,667. 
B)  $29,000. 
C)  $32,000. 
D)  $23,800. 
A)  $39,667. 
B)  $29,000. 
C)  $32,000. 
D)  $23,800.

Question 11

The journal entry to close net income to the partners is to:

Accepted Answer

A)  debit Income Summary; credit the capital accounts. 
B)  debit the capital accounts; credit Income Summary. 
C)  debit the capital accounts; credit Net Loss. 
D)  debit Net Loss; credit the capital accounts. 
A)  debit Income Summary; credit the capital accounts. 
B)  debit the capital accounts; credit Income Summary. 
C)  debit the capital accounts; credit Net Loss. 
D)  debit Net Loss; credit the capital accounts.

Question 12

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances.   Non-cash assets are sold for $305,000. Profits and losses are shared equally.
After all liabilities are paid, divide the remaining cash amongst the partners.

Accepted Answer

The answer of After several years of business, Abel, Barney,...

Question 13

Partners Eric and Jeremy each have $7,000 capital balances and share income and losses in a 2:1 ratio for Eric and Jeremy, respectively. Cash equals $3,000, noncash assets are $16,000, and liabilities are $5,000. If all the noncash assets are sold for $2,000, and each partner is personally insolvent, Jeremy eventually will receive cash of:

Accepted Answer

A)  $0. 
B)  $6,000. 
C)  $4,667. 
D)  $12,000. 
A)  $0. 
B)  $6,000. 
C)  $4,667. 
D)  $12,000.

Question 14

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 15

The original investment balances of partners Bridget and Emily are $9,000 and $19,000, respectively. Bridget and Emily work full time in the business. The business earned net income of $20,000 for the period. The partners have agreed to share earnings based upon the percentage of original investment. Bridget's share of the net income is: (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Accepted Answer

A)  $9,474. 
B)  $10,000. 
C)  $6,400. 
D)  indeterminable. 
A)  $9,474. 
B)  $10,000. 
C)  $6,400. 
D)  indeterminable.

Question 16

Allison and Josh are partners in a business. Allison's capital is $120,000 and Josh's capital is $120,000. Profits for the year are $80,000. They agree to share profits and losses as follows:   Allison's share of the profits before paying salaries and interest on capital is: (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Accepted Answer

A)  $48,000. 
B)  $70,500. 
C)  $40,000. 
D)  $11,400. 
A)  $48,000. 
B)  $70,500. 
C)  $40,000. 
D)  $11,400.

Question 17

Joan and Helen are partners who have agreed to allow Carol to purchase Helen's share for a direct payment of $36,000 to Helen. Joan and Helen's previous capital balances were $10,000 and $17,000, respectively. What will be the amount in Carol's capital account?

Accepted Answer

A)  $17,000 
B)  $10,000 
C)  $36,000 
D)  Some other number 
A)  $17,000 
B)  $10,000 
C)  $36,000 
D)  Some other number

Question 18

Dissolution of a partnership can occur under the limited life characteristic if a partner:

Accepted Answer

A)  dies. 
B)  becomes incapacitated. 
C)  goes bankrupt. 
D)  All of the above are correct. 
A)  dies. 
B)  becomes incapacitated. 
C)  goes bankrupt. 
D)  All of the above are correct.

Question 19

A partnership can be joined by:

Accepted Answer

A)  investing into the business. 
B)  purchasing an equity interest in the business. 
C)  buying out one of the partners and taking over their interest (by mutual agreement). 
D)  All of the above are correct. 
A)  investing into the business. 
B)  purchasing an equity interest in the business. 
C)  buying out one of the partners and taking over their interest (by mutual agreement). 
D)  All of the above are correct.

Question 20

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances.   Non-cash assets are sold for $270,000. Profits and losses are shared equally.
Record the sale of the noncash items.

Accepted Answer

The answer of After several years of business, Abel, Barney,...

When two proprietors decide to combine their businesses and form a partnership, GAAP usually requires that noncash assets be taken over at their:

After all liabilities have been paid, the remaining assets are distributed based on equal share to partners.

When a partnership is liquidated, the journal entry to pay the claims of creditors would include:

The last step taken in liquidating a partnership is to:

Mary sold Jill her equity in the Mary and Jill partnership for $31,000. If both Mary and Jill had a $16,000 capital balance, the entry to record this transaction would be to:

Partners are required to report their share of partnership earnings on their personal tax return.

Jan and Ben are partners, with beginning capital balances of $70,000 and $62,000 respectively. During the year, Jan withdrew $12,000 and Ben withdrew $23,000. The year's net income of $48,000 was distributed $19,000 to Jan and $29,000 to Ben. Calculate the ending balances in the capital accounts.

Allan and Rick are partners who share profits and losses in the ratio of 3:2 for Allan and Rick, respectively. They have capital balances of $40,000 and $47,000, respectively. If Tammy invests $32,000 for one-third interest, Tammy's capital balance will be: (Round your answer to the nearest dollar.)

The journal entry to close net income to the partners is to:

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances. Non-cash assets are sold for $305,000. Profits and losses are shared equally. After all liabilities are paid, divide the remaining cash amongst the partners.

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

Joan and Helen are partners who have agreed to allow Carol to purchase Helen's share for a direct payment of $36,000 to Helen. Joan and Helen's previous capital balances were $10,000 and $17,000, respectively. What will be the amount in Carol's capital account?

Dissolution of a partnership can occur under the limited life characteristic if a partner:

A partnership can be joined by:

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances. Non-cash assets are sold for $270,000. Profits and losses are shared equally. Record the sale of the noncash items.

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

Exam 17: Partnership

When two proprietors decide to combine their businesses and form a partnership, GAAP usually requires that noncash assets be taken over at their:

After all liabilities have been paid, the remaining assets are distributed based on equal share to partners.

When a partnership is liquidated, the journal entry to pay the claims of creditors would include:

The last step taken in liquidating a partnership is to:

Mary sold Jill her equity in the Mary and Jill partnership for $31,000. If both Mary and Jill had a $16,000 capital balance, the entry to record this transaction would be to:

Partners are required to report their share of partnership earnings on their personal tax return.

Jan and Ben are partners, with beginning capital balances of $70,000 and $62,000 respectively. During the year, Jan withdrew $12,000 and Ben withdrew $23,000. The year's net income of $48,000 was distributed $19,000 to Jan and $29,000 to Ben. Calculate the ending balances in the capital accounts.

The journal entry to close net income to the partners is to:

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances. Non-cash assets are sold for $305,000. Profits and losses are shared equally. After all liabilities are paid, divide the remaining cash amongst the partners.

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

Joan and Helen are partners who have agreed to allow Carol to purchase Helen's share for a direct payment of $36,000 to Helen. Joan and Helen's previous capital balances were $10,000 and $17,000, respectively. What will be the amount in Carol's capital account?

Dissolution of a partnership can occur under the limited life characteristic if a partner:

A partnership can be joined by:

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances. Non-cash assets are sold for $270,000. Profits and losses are shared equally. Record the sale of the noncash items.

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