Question 1

A partnership cannot be formed with an oral agreement.

Accepted Answer

A) True 
 B)False

Question 2

Allison and Josh are partners in a business. Allison's capital is $60,000 and Josh's capital is $100,000. Profits for the year are $80,000. They agree to share profits and losses as follows:   Josh's share of the profit is:

Accepted Answer

A) $32,000. 
B) $44,000. 
C) ($8,000). 
D) None of the above. 
A) $32,000. 
B) $44,000. 
C) ($8,000). 
D) None of the above.

Question 3

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

Accepted Answer

A) pay more than what the new partner's 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 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 4

Given the following accounts:
   Indicate the account(s)to be debited and credited to record the following transactions.
-Able partner withdrew cash from the business.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

The answer of Given the following accounts:
   Indicate...

Question 5

Unlimited liability means that the act of a single partner is binding on all the other partners.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

a)A partnership has a limited life. When

Question 7

Partners Eric and Jeremy each have $3,000 capital balances and share income and losses in a 2:1 ratio, respectively. Cash equals $1,000, noncash assets are $10,000, and liabilities are $5,000. If all the noncash assets are sold for $4,000, and each partner is personally insolvent, Jeremy eventually will receive cash of:

Accepted Answer

A) $0. 
B) $1,000. 
C) $1,500. 
D) $2,000. 
A) $0. 
B) $1,000. 
C) $1,500. 
D) $2,000.

Question 8

Prepare the journal entry to record the partners' investment in the company.
Palmer invests $1,000 cash and equipment on his books at $6,500 with accumulated depreciation of $1,500. The fair market value of the equipment is $7,000. Evans is investing $7,000 cash and $700 accounts payable.

Accepted Answer

The answer of Prepare the journal entry to record the...

Question 9

Mary sold Jill her equity in the Mary and Jill partnership for $13,000. If both Mary and Jill had a $10,000 capital balance, the entry to record this transaction would be to:

Accepted Answer

A) debit Cash $13,000; credit Jill, Capital $13,000. 
B) debit Mary, Capital $10,000; credit Jill, Capital $10,000. 
C) debit Cash $13,000; credit Mary, Capital $13,000. 
D) debit Jill, Capital $10,000; credit Mary, Capital $10,000. 
A) debit Cash $13,000; credit Jill, Capital $13,000. 
B) debit Mary, Capital $10,000; credit Jill, Capital $10,000. 
C) debit Cash $13,000; credit Mary, Capital $13,000. 
D) debit Jill, Capital $10,000; credit Mary, Capital $10,000.

Question 10

Tim and Bev are partners who share profits and losses in the ratio of 6:4. Their capital balances are $35,000 and $20,000, respectively. If Jenny is admitted to the partnership for $25,000 for a one-fourth interest, her capital balance will be:

Accepted Answer

A) $26,667. 
B) $20,000. 
C) $25,000. 
D) $13,750. 
A) $26,667. 
B) $20,000. 
C) $25,000. 
D) $13,750.

Question 11

Partners Brian, Josh, and Chad have capital balances of $7,000, $3,000, and $90,000, respectively. The losses for the year are $12,000. What will Josh's capital balance be if the three partners share profits and losses at a 2:2:6 ratio?

Accepted Answer

A) $600 credit balance 
B) $1,000 debit balance 
C) $2,400 debit balance 
D) $4,000 debit balance 
A) $600 credit balance 
B) $1,000 debit balance 
C) $2,400 debit balance 
D) $4,000 debit balance

Question 12

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.

Question 13

The two types of allowances that may be considered before the division of profits and losses are:

Accepted Answer

A) interest and salary allowances. 
B) interest and bonus allowances. 
C) salary and bonus allowances. 
D) bonus and liquidation allowances. 
A) interest and salary allowances. 
B) interest and bonus allowances. 
C) salary and bonus allowances. 
D) bonus and liquidation allowances.

Question 14

The first entry to liquidate a partnership would probably include:

Accepted Answer

A) debit to Cash; credit to individual assets sold. 
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 Cash; credit to individual assets sold. 
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 15

The first step take 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 16

All assets held by a partnership are:

Accepted Answer

A) co-owned by all partners. 
B) owned by the partner(s)who purchased the assets. 
C) owned by the partners based on investment percentage. 
D) owned by the partnership. 
A) co-owned by all partners. 
B) owned by the partner(s)who purchased the assets. 
C) owned by the partners based on investment percentage. 
D) owned by the partnership.

Question 17

A partnership can be terminated by which of the following?

Accepted Answer

A) Bankruptcy 
B) Death of a partner 
C) Agreement by partners 
D) All of the above 
A) Bankruptcy 
B) Death of a partner 
C) Agreement by partners 
D) All of the above

Question 18

The profit and loss ratio is required to be equally divided between and among the partners.

Accepted Answer

A) True 
 B)False

Question 19

Partner B invested inventory using the retail selling price for valuation. This error would cause:

Accepted Answer

A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the ending assets to be overstated. 
D) Both A and C are correct. 
A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the ending assets to be overstated. 
D) Both A and C are correct.

Question 20

Given the following accounts:
   Indicate the account(s)to be debited and credited to record the following transactions.
-During liquidation realized less than book value for the store equipment.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

Debit 1 &

Exam 17: Partnership

A partnership cannot be formed with an oral agreement.

Allison and Josh are partners in a business. Allison's capital is $60,000 and Josh's capital is $100,000. Profits for the year are $80,000. They agree to share profits and losses as follows: Josh's share of the profit is:

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

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Able partner withdrew cash from the business. Debit ________ & ________ & ________ Credit ________ & ________ & ________

Unlimited liability means that the act of a single partner is binding on all the other partners.

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

Prepare the journal entry to record the partners' investment in the company. Palmer invests $1,000 cash and equipment on his books at $6,500 with accumulated depreciation of $1,500. The fair market value of the equipment is $7,000. Evans is investing $7,000 cash and $700 accounts payable.

Mary sold Jill her equity in the Mary and Jill partnership for $13,000. If both Mary and Jill had a $10,000 capital balance, the entry to record this transaction would be to:

Tim and Bev are partners who share profits and losses in the ratio of 6:4. Their capital balances are $35,000 and $20,000, respectively. If Jenny is admitted to the partnership for $25,000 for a one-fourth interest, her capital balance will be:

Partners Brian, Josh, and Chad have capital balances of $7,000, $3,000, and $90,000, respectively. The losses for the year are $12,000. What will Josh's capital balance be if the three partners share profits and losses at a 2:2:6 ratio?

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

The two types of allowances that may be considered before the division of profits and losses are:

The first entry to liquidate a partnership would probably include:

The first step take in liquidating a partnership is to:

All assets held by a partnership are:

A partnership can be terminated by which of the following?

The profit and loss ratio is required to be equally divided between and among the partners.

Partner B invested inventory using the retail selling price for valuation. This error would cause:

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -During liquidation realized less than book value for the store equipment. Debit ________ & ________ & ________ Credit ________ & ________ & ________

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: the Conclusion of the Payroll Process

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, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Able partner withdrew cash from the business. Debit & & Credit & &

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -During liquidation realized less than book value for the store equipment. Debit & & Credit & &