Question 1

Accounting procedures for all items are the same for both C corporations and S corporations in all aspects.

Accepted Answer

A) True 
 B)False

Question 2

Badger and Fox are forming a partnership.Badger invests a building that has a market value of $350,000; the partnership assumes responsibility for a $125,000 note secured by a mortgage on the property.Fox invests $100,000 in cash and equipment that has a market value of $75,000.For the partnership,the amounts recorded for Badger's Capital account and for Fox's Capital account are:

Accepted Answer

A) Badger, Capital $350,000; Fox, Capital $175,000. 
B) Badger, Capital $225,000; Fox, Capital $100,000. 
C) Badger, Capital $225,000; Fox, Capital $75,000. 
D) Badger, Capital $350,000; Fox, Capital $100,000. 
E) Badger, Capital $225,000; Fox, Capital $175,000. 
A) Badger, Capital $350,000; Fox, Capital $175,000. 
B) Badger, Capital $225,000; Fox, Capital $100,000. 
C) Badger, Capital $225,000; Fox, Capital $75,000. 
D) Badger, Capital $350,000; Fox, Capital $100,000. 
E) Badger, Capital $225,000; Fox, Capital $175,000.

Question 3

Which of the following statements is true?

Accepted Answer

A) Partners are employees of the partnership. 
B) Salaries to partners are expenses on the partnership income statement. 
C) Salary allowances usually reflect the relative value of services provided by partners. 
D) Salary allowances are expenses. 
E) Interest allowances are expenses. 
A) Partners are employees of the partnership. 
B) Salaries to partners are expenses on the partnership income statement. 
C) Salary allowances usually reflect the relative value of services provided by partners. 
D) Salary allowances are expenses. 
E) Interest allowances are expenses.

Question 4

Rice,Hepburn,and DiMarco formed a partnership with Rice contributing $60,000,Hepburn contributing $50,000 and DiMarco contributing $40,000.Their partnership agreement called for the income (loss)division to be based on the ratio of capital investments.If the partnership had income of $75,000 for its first year of operation,what amount of income (rounded to the nearest thousand)would be credited to DiMarco's capital account?

Accepted Answer

A) $20,000. 
B) $25,000. 
C) $30,000. 
D) $40,000. 
E) $75,000. 
A) $20,000. 
B) $25,000. 
C) $30,000. 
D) $40,000. 
E) $75,000.

Question 5

Alberts and Bartel are partners.On October 1,Alberts' capital balance is $75,000,and Bartel's capital balance is $125,000.With the partnership's approval,Bartel sells ½ of his partnership interest to Camero for $70,000.Prepare the journal entry to record this transaction in the partnership records.

Accepted Answer

Bartel,Capital ……………

Question 6

Partner return on equity is calculated as ______________________________.

Accepted Answer

Partner Re

Question 7

To buy into an existing partnership,the new partner must contribute cash to the partnership.

Accepted Answer

A) True 
 B)False

Question 8

Salary allowances are reported as salaries expense on a partnership income statement.

Accepted Answer

A) True 
 B)False

Question 9

Paco and Kate invested $99,000 and $126,000,respectively,in a partnership they began one year ago.Assuming the partnership earned $120,000 during the current year; compute the share of the net income each partner should receive under each of these independent assumptions.

Accepted Answer

The answer of Paco and Kate invested $99,000 and $126,000,respectively,in...

Question 10

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ________________________ partnership.

Accepted Answer

The answer of A partnership designed to protect innocent partners...

Question 11

Sierra and Jenson formed a partnership.Sierra contributed $25,000 cash and accounts receivable worth $11,000.Jenson's investment included cash,$5,000; inventory,$18,000; and supplies,$1,000.Prepare the journal entries to record each partner's investment in the new partnership.

Accepted Answer

The answer of Sierra and Jenson formed a partnership.Sierra contributed...

Question 12

The withdrawals account of each partner is:

Accepted Answer

A) Closed to that partner's capital account with a credit. 
B) Closed to that partner's capital account with a debit. 
C) A permanent account that is not closed. 
D) Credited with that partner's share of net income. 
E) Debited with that partner's share of net loss. 
A) Closed to that partner's capital account with a credit. 
B) Closed to that partner's capital account with a debit. 
C) A permanent account that is not closed. 
D) Credited with that partner's share of net income. 
E) Debited with that partner's share of net loss.

Question 13

Armstrong plans to leave the FAP Partnership.The recorded balance in her capital account is $48,000.The remaining partners,Peters and Floyd,agree to pay Armstrong $58,000 cash and Armstrong accepts.The partners share income and loss equally.Prepare the journal entry to record the transaction.

Accepted Answer

Armstrong,Capital………………… 48,00

Question 14

Khalid,Dina,and James are partners with beginning-of-year capital balances of $400,000,$320,000,and $160,000,respectively.The partners agreed to share income and loss as follows:
 Salary of $30,000 to Khalid,$50,000 to Dina,and $55,000 to James.An interest allowance of 10% on beginning-of-year capital balances.Any remaining balance is to be divided equally.If partnership net income for the year is $190,000,determine each partner's share and make the appropriate journal entry to close the Income Summary to the capital accounts.

Accepted Answer

@#IMG-DLM& Income Summary ……………………………………

Question 15

Smith,West,and Krug form a partnership.Smith contributes $180,000,West contributes $150,000,and Krug contributes $270,000.Their partnership agreement calls for a 5% interest allowance on the partner's capital balances with the remaining income or loss to be allocated equally.If the partnership reports income of $174,000 for its first year,what amount of income is credited to West's capital account?

Accepted Answer

A) $58,000. 
B) $57,000. 
C) $61,500. 
D) $55,500. 
E) $48,000. 
A) $58,000. 
B) $57,000. 
C) $61,500. 
D) $55,500. 
E) $48,000.

Question 16

Marquis and Bose agree to accept Sherman into their partnership.Sherman will contribute $25,000 in cash.Prepare the journal entry to record this transaction.

Accepted Answer

Cash………………………… 25,00

Question 17

__________________ implies that each partner in a partnership can be called on to pay a partnership's debts.

Accepted Answer

The answer of __________________ implies that each partner in a...

Question 18

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from acts of another partner is a:

Accepted Answer

A) Partnership. 
B) Limited partnership. 
C) Limited liability partnership. 
D) General partnership. 
E) Limited liability company. 
A) Partnership. 
B) Limited partnership. 
C) Limited liability partnership. 
D) General partnership. 
E) Limited liability company.

Question 19

Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

Accepted Answer

A) True 
 B)False

Question 20

A relatively new form of business organization that protects partners with limited liability,allows limited partners to assume an active management role,and is taxed as a partnership is a ______________________________

Accepted Answer

limited li

Exam 12: Accounting for Partnerships

Accounting procedures for all items are the same for both C corporations and S corporations in all aspects.

Which of the following statements is true?

Partner return on equity is calculated as ______________________________.

To buy into an existing partnership,the new partner must contribute cash to the partnership.

Salary allowances are reported as salaries expense on a partnership income statement.

Paco and Kate invested $99,000 and $126,000,respectively,in a partnership they began one year ago.Assuming the partnership earned $120,000 during the current year; compute the share of the net income each partner should receive under each of these independent assumptions.

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ________________________ partnership.

Sierra and Jenson formed a partnership.Sierra contributed $25,000 cash and accounts receivable worth $11,000.Jenson's investment included cash,$5,000; inventory,$18,000; and supplies,$1,000.Prepare the journal entries to record each partner's investment in the new partnership.

The withdrawals account of each partner is:

Armstrong plans to leave the FAP Partnership.The recorded balance in her capital account is $48,000.The remaining partners,Peters and Floyd,agree to pay Armstrong $58,000 cash and Armstrong accepts.The partners share income and loss equally.Prepare the journal entry to record the transaction.

Marquis and Bose agree to accept Sherman into their partnership.Sherman will contribute $25,000 in cash.Prepare the journal entry to record this transaction.

__________________ implies that each partner in a partnership can be called on to pay a partnership's debts.

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from acts of another partner is a:

Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

A relatively new form of business organization that protects partners with limited liability,allows limited partners to assume an active management role,and is taxed as a partnership is a ______________________________

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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