Question 1

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 2

Fontaine and Monroe are forming a partnership.Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property.Monroe invests $100,000 in cash and equipment that has a market value of $55,000.
-For the partnership,the amounts recorded for the building and for Fontaine's Capital account are:

Accepted Answer

A)  Building $250,000; Fontaine, Capital $250,000. 
B)  Building $175,000; Fontaine, Capital $175,000. 
C)  Building $250,000; Fontaine, Capital $75,000. 
D)  Building $250,000; Fontaine, Capital $175,000. 
E)  Building $175,000; Fontaine, Capital $75,000. 
A)  Building $250,000; Fontaine, Capital $250,000. 
B)  Building $175,000; Fontaine, Capital $175,000. 
C)  Building $250,000; Fontaine, Capital $75,000. 
D)  Building $250,000; Fontaine, Capital $175,000. 
E)  Building $175,000; Fontaine, Capital $75,000.

Question 3

Partners' withdrawals are debited to their separate withdrawals accounts.

Accepted Answer

A) True 
 B)False

Question 4

An unincorporated association of two or more persons to pursue a business for profit as co-owners is a:

Accepted Answer

A)  Partnership. 
B)  Proprietorship. 
C)  Contractual company. 
D)  Mutual agency. 
E)  Voluntary organization. 
A)  Partnership. 
B)  Proprietorship. 
C)  Contractual company. 
D)  Mutual agency. 
E)  Voluntary organization.

Question 5

Cox,North,and Lee form a partnership.Cox contributes $180,000,North contributes $150,000,and Lee 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 Lee'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 6

A Limited Liability Partnership (LLP)is designed to protect innocent partners from malpractice or negligence claims resulting from the acts of another partner.

Accepted Answer

A) True 
 B)False

Question 7

If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

Accepted Answer

A)  C Corporation 
B)  S Corporation 
C)  Limited liability partnership 
D)  Partnership 
E)  Limited liability company 
A)  C Corporation 
B)  S Corporation 
C)  Limited liability partnership 
D)  Partnership 
E)  Limited liability company

Question 8

The following information is available on PDC Enterprises,a partnership,for the most recent fiscal year:
$$\begin{array} { l l } 
\text { Total partnership capital at beginning of the year } & \$ 1,080,000 \
\text { Partriership net income for the year } & \$ 1,250,000 \
\text { Withdrawals by partners during the year } & \$ 320,000 \
\text { Additional investrnents by partners during the year } & \$ 70,000
\end{array}$$
There are three partners in TGR Enterprises: Pearson,Darling and Cathay.At the end of the year,the partners' capital accounts were in the ratio of 2:2:1,respectively.Compute the ending capital balances of Cathay.

Accepted Answer

A)  $466,000. 
B)  $402,000. 
C)  $416,000. 
D)  $544,000. 
E)  $388,000. 
A)  $466,000. 
B)  $402,000. 
C)  $416,000. 
D)  $544,000. 
E)  $388,000.

Question 9

Olivia Greer is a partner in Made for You.An analysis of Greer's capital account indicates that during the most recent year,she withdrew $30,000 from the partnership.Her share of the partnership's net loss was $16,000 and she made an additional equity contribution of $10,000.Her capital account ended the year at $150,000.What was her capital balance at the beginning of the year?

Accepted Answer

A)  $154,000 
B)  $170,000 
C)  $180,000 
D)  $186,000 
E)  $196,000 
A)  $154,000 
B)  $170,000 
C)  $180,000 
D)  $186,000 
E)  $196,000

Question 10

Hewlett and Martin are partners.Hewlett's capital balance in the partnership is $64,000,and Martin's capital balance $67,000.Hewlett and Martin have agreed to share equally in income or loss.The existing partners agree to accept Black with a 20% interest.Black will invest $35,000 in the partnership.The bonus that is granted to Hewlett and Martin equals:

Accepted Answer

A)  $900 each. 
B)  $1,500 each. 
C)  $600 each. 
D)  600 to Hewlett; $900 to Martin. 
E)  $0, because Hewlett and Martin actually grant a bonus to Black. 
A)  $900 each. 
B)  $1,500 each. 
C)  $600 each. 
D)  600 to Hewlett; $900 to Martin. 
E)  $0, because Hewlett and Martin actually grant a bonus to Black.

Question 11

The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner.

Accepted Answer

A) True 
 B)False

Question 12

Brown invested $200,000 and Freeman invested $150,000 in a partnership.They agreed to an interest allowance on the partners' beginning-year capital investments at 10%,with the balance to be shared equally.Under this agreement,the shares of the partners when the partnership earns $205,000 in income are:

Accepted Answer

A)  $102,500 to Brown; $102,500 to Freeman. 
B)  $117,143 to Brown; $87,857 to Freeman. 
C)  $122,500 to Brown; $82,500 to Freeman. 
D)  $105,000 to Brown; $100,000 to Freeman. 
E)  $112,750 to Brown; $92,250 to Freeman. 
A)  $102,500 to Brown; $102,500 to Freeman. 
B)  $117,143 to Brown; $87,857 to Freeman. 
C)  $122,500 to Brown; $82,500 to Freeman. 
D)  $105,000 to Brown; $100,000 to Freeman. 
E)  $112,750 to Brown; $92,250 to Freeman.

Question 13

Match each of the following terms with the appropriate definitions.
-An unincorporated association of two or more persons to pursue a business for profit as co-owners.

Accepted Answer

A) General partner 
B) Limited liability partnership 
C) Unlimited liability of partners 
D) C corporation 
E) Statement of partners' equity
F)Mutual agency
G)Limited partnership
H)S corporation
I)Partnership
J)Partnership contract 
A) General partner 
B) Limited liability partnership 
C) Unlimited liability of partners 
D) C corporation 
E) Statement of partners' equity
F)Mutual agency
G)Limited partnership
H)S corporation
I)Partnership
J)Partnership contract

Question 14

A capital deficiency can arise from liquidation losses,excessive withdrawals before liquidation,or recurring losses in prior periods.

Accepted Answer

A) True 
 B)False

Question 15

Harvey and Quick have decided to form a partnership.Harvey is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership.The following information regarding the asset to be contributed by Harvey is available:
$$\begin{array} { l l } 
\text { Historical cost of the asset } & \$ 76,000 \
\text { Accumulated depreciation on the asset } & \$ 40,000 \
\text { Note payable secured by the asset* } & \$ 18,000 \
\text { Agreed-upon market value of the asset } & \$ 45,000 \\
 *\text { will be assumed by the partriership }
\end{array}$$
Based on this information,Harvey's beginning equity balance in the partnership will be:

Accepted Answer

A)  $76,000 
B)  $36,000 
C)  $18,000 
D)  $27,000 
E)  $45,000 
A)  $76,000 
B)  $36,000 
C)  $18,000 
D)  $27,000 
E)  $45,000

Question 16

Match each of the following terms with the appropriate definitions.
-A financial statement that shows total capital balances at the beginning of the period,any additional investment by partners,the income or loss of the period,the partners' withdrawals,and the ending capital balances.

Accepted Answer

A) General partner 
B) Limited liability partnership 
C) Unlimited liability of partners 
D) C corporation 
E) Statement of partners' equity
F)Mutual agency
G)Limited partnership
H)S corporation
I)Partnership
J)Partnership contract 
A) General partner 
B) Limited liability partnership 
C) Unlimited liability of partners 
D) C corporation 
E) Statement of partners' equity
F)Mutual agency
G)Limited partnership
H)S corporation
I)Partnership
J)Partnership contract

Question 17

Total partnership income is reported to the IRS on Form 1065.

Accepted Answer

A) True 
 B)False

Question 18

R.Stetson contributed $14,000 in cash plus office equipment valued at $7,000 to the SJ Partnership.The journal entry to record the transaction for the partnership is:

Accepted Answer

A)  Debit Cash $14,000; debit Office Equipment $7,000; credit R Stetson, Capital $21,000. 
B)  Debit Cash $14,000; debit Office Equipment $7,000; credit SJ Partnership, Capital $21,000. 
C)  Debit SJ Partnership $21,000; credit R. Stetson, Capital $21,000. 
D)  Debit R. Stetson, Capital $21,000; credit SJ Partnership, Capital $21,000. 
E)  Debit Cash $14,000; debit Office Equipment $7,000; credit Common Stock $21,000. 
A)  Debit Cash $14,000; debit Office Equipment $7,000; credit R Stetson, Capital $21,000. 
B)  Debit Cash $14,000; debit Office Equipment $7,000; credit SJ Partnership, Capital $21,000. 
C)  Debit SJ Partnership $21,000; credit R. Stetson, Capital $21,000. 
D)  Debit R. Stetson, Capital $21,000; credit SJ Partnership, Capital $21,000. 
E)  Debit Cash $14,000; debit Office Equipment $7,000; credit Common Stock $21,000.

Question 19

At least one partner having a debit balance in his/her capital account at the point of the final distribution of cash is known as a ________.

Accepted Answer

The answer of At least one partner having a debit...

Question 20

What are the ways a partner can withdraw from a partnership? Explain how to account for the withdrawal of a current partner from a partnership.

Accepted Answer

A partner may sell his or her interest i

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

Partners' withdrawals are debited to their separate withdrawals accounts.

An unincorporated association of two or more persons to pursue a business for profit as co-owners is a:

A Limited Liability Partnership (LLP)is designed to protect innocent partners from malpractice or negligence claims resulting from the acts of another partner.

If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner.

Match each of the following terms with the appropriate definitions. -An unincorporated association of two or more persons to pursue a business for profit as co-owners.

A capital deficiency can arise from liquidation losses,excessive withdrawals before liquidation,or recurring losses in prior periods.

Match each of the following terms with the appropriate definitions. -A financial statement that shows total capital balances at the beginning of the period,any additional investment by partners,the income or loss of the period,the partners' withdrawals,and the ending capital balances.

Total partnership income is reported to the IRS on Form 1065.

R.Stetson contributed $14,000 in cash plus office equipment valued at $7,000 to the SJ Partnership.The journal entry to record the transaction for the partnership is:

At least one partner having a debit balance in his/her capital account at the point of the final distribution of cash is known as a ________.

What are the ways a partner can withdraw from a partnership? Explain how to account for the withdrawal of a current partner from a partnership.

Accounting in Business

Analyzing for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

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Exam 16: Partnership Accounting

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

Partners' withdrawals are debited to their separate withdrawals accounts.

An unincorporated association of two or more persons to pursue a business for profit as co-owners is a:

A Limited Liability Partnership (LLP)is designed to protect innocent partners from malpractice or negligence claims resulting from the acts of another partner.

If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner.

Match each of the following terms with the appropriate definitions. -An unincorporated association of two or more persons to pursue a business for profit as co-owners.

A capital deficiency can arise from liquidation losses,excessive withdrawals before liquidation,or recurring losses in prior periods.

Match each of the following terms with the appropriate definitions. -A financial statement that shows total capital balances at the beginning of the period,any additional investment by partners,the income or loss of the period,the partners' withdrawals,and the ending capital balances.

Total partnership income is reported to the IRS on Form 1065.

R.Stetson contributed $14,000 in cash plus office equipment valued at $7,000 to the SJ Partnership.The journal entry to record the transaction for the partnership is:

At least one partner having a debit balance in his/her capital account at the point of the final distribution of cash is known as a ________.

What are the ways a partner can withdraw from a partnership? Explain how to account for the withdrawal of a current partner from a partnership.

Accounting in Business

Analyzing for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Filters