Question 1

Salary and interest allowances for partners are:

Accepted Answer

A) expenses on the income statement. 
B) liabilities on the balance sheet. 
C) a means of dividing net income or loss between the partners. 
D) None of these answers are correct. 
A) expenses on the income statement. 
B) liabilities on the balance sheet. 
C) a means of dividing net income or loss between the partners. 
D) None of these answers are correct.

Question 2

Partners Brian, Josh, and Chad have average capital balances of $7,000, $3,000, and $90,000, respectively. Net income for the year is $12,000. Salary allowances are $14,000 for Brian and $5,000 for Josh. Chad gets 10% interest on his capital balance with the remainder being divided at a 1:1:2 ratio. What is Brian's capital balance after distributing the net income?

Accepted Answer

A) $17,000 credit balance 
B) $3,000 debit balance 
C) $10,000 debit balance 
D) $7,000 debit balance 
A) $17,000 credit balance 
B) $3,000 debit balance 
C) $10,000 debit balance 
D) $7,000 debit balance

Question 3

John and Brad have average capital balances of $25,000 and $10,000, respectively. The partners have agreed to allow $20,000 salary allowances. The partners will share income and losses in a 1:2 ratio. How much will each partner's capital account change if net income is $70,000?

Accepted Answer

The answer of John and Brad have average capital balances...

Question 4

Given the following accounts:
   Indicate the account(s)to be debited and credited to record the following transactions.
-Closed the income summary to the partners' accounts with a net income.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

Debit 14,

Question 5

The partnership of Smith and Jones, who have average capital balances of $11,000 and $19,000, respectively, earned $90,000 net income. Under each of the following independent situations, calculate the distribution of the $90,000.
a)No agreement was established.
b)Share based on their average capital balances.

Accepted Answer

a)Smith, $45,000; Jo

Question 6

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances.
   Non-cash assets are sold for $275,000. Profits and losses are shared equally.
Record the payment of the liabilities.

Accepted Answer

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

Question 7

If the retiring partner's interest is sold to one of the remaining partners, the retiring partner's equity is merely transferred to the other partner.

Accepted Answer

A) True 
 B)False

Question 8

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 9

After all liabilities have been paid, the remaining assets are always distributed evenly.

Accepted Answer

A) True 
 B)False

Question 10

Many associations such as medical centers and law firms could organize as a:

Accepted Answer

A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) All of the above. 
A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) All of the above.

Question 11

A partnership can be joined by:

Accepted Answer

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

Question 12

The partnership of Rick and Allan is being liquidated. All gains and losses are shared in a 3:5 ratio, respectively. Before liquidation, their balance sheet balances are as follows:
   If the Other Assets are sold for $10,000, how much will each partner receive upon liquidation?

Accepted Answer

Rick $7,75

Question 13

The partnership dissolves when a partner leaves. This characteristic is called:

Accepted Answer

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

Question 14

Given the following accounts:
   Indicate the account(s)to be debited and credited to record the following transactions.
-Closed Baker Partner's withdrawals.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

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

Question 15

Dows and Sands' partnership capital balances are $40,000 and $60,000, respectively. They share profits and losses in a 1:3 ratio, respectively. Davis is admitted to the partnership and invests $60,000 for a one-fourth interest, with a bonus to the old partners. Prepare the journal entry to admit Davis to the partnership.

Accepted Answer

@#IMG-DLM& Total capital = $40,000 + $60

Question 16

James wants to invest cash so that he will have a one-third interest in Thomas and Stanley's company. The capital balances are $2,000 Thomas, $6,000 Stanley. The admission of James would be to:

Accepted Answer

A) debit Cash $2,666.67; credit James, Capital $2,666.67. 
B) debit Cash $5,333.33; credit James, Capital $5,333.33. 
C) debit Cash $3,000; credit James, Capital $3,000. 
D) debit Cash $4,000; credit James, Capital $4,000. 
A) debit Cash $2,666.67; credit James, Capital $2,666.67. 
B) debit Cash $5,333.33; credit James, Capital $5,333.33. 
C) debit Cash $3,000; credit James, Capital $3,000. 
D) debit Cash $4,000; credit James, Capital $4,000.

Question 17

When a partner withdraws from a partnership, the company can:

Accepted Answer

A) audit the accounting records and adjust assets to historical value. 
B) credit the account of the partner that withdrew, debit Cash. 
C) share any loss or profit from the historical value of assets. 
D) None of the above answers is correct. 
A) audit the accounting records and adjust assets to historical value. 
B) credit the account of the partner that withdrew, debit Cash. 
C) share any loss or profit from the historical value of assets. 
D) None of the above answers is correct.

Question 18

A loss occurs when net income is not large enough to cover salary and interest allowances for the partners.

Accepted Answer

A) True 
 B)False

Question 19

An investment by a new partner was credited to existing partners' capital balances. This error would cause:

Accepted Answer

A) the new partner's capital account to be understated. 
B) the period end owner's equity to be understated. 
C) the period end assets to be overstated. 
D) None of these are correct. 
A) the new partner's capital account to be understated. 
B) the period end owner's equity to be understated. 
C) the period end assets to be overstated. 
D) None of these are correct.

Question 20

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.

Exam 17: Partnership

Salary and interest allowances for partners are:

John and Brad have average capital balances of $25,000 and $10,000, respectively. The partners have agreed to allow $20,000 salary allowances. The partners will share income and losses in a 1:2 ratio. How much will each partner's capital account change if net income is $70,000?

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Closed the income summary to the partners' accounts with a net income. Debit ________ & ________ & ________ Credit ________ & ________ & ________

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances. Non-cash assets are sold for $275,000. Profits and losses are shared equally. Record the payment of the liabilities.

If the retiring partner's interest is sold to one of the remaining partners, the retiring partner's equity is merely transferred to the other partner.

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

After all liabilities have been paid, the remaining assets are always distributed evenly.

Many associations such as medical centers and law firms could organize as a:

A partnership can be joined by:

The partnership of Rick and Allan is being liquidated. All gains and losses are shared in a 3:5 ratio, respectively. Before liquidation, their balance sheet balances are as follows: If the Other Assets are sold for $10,000, how much will each partner receive upon liquidation?

The partnership dissolves when a partner leaves. This characteristic is called:

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Closed Baker Partner's withdrawals. Debit ________ & ________ & ________ Credit ________ & ________ & ________

James wants to invest cash so that he will have a one-third interest in Thomas and Stanley's company. The capital balances are $2,000 Thomas, $6,000 Stanley. The admission of James would be to:

When a partner withdraws from a partnership, the company can:

A loss occurs when net income is not large enough to cover salary and interest allowances for the partners.

An investment by a new partner was credited to existing partners' capital balances. This error would cause:

The different partners are taxed on:

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. -Closed the income summary to the partners' accounts with a net income. Debit & & Credit & &

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Closed Baker Partner's withdrawals. Debit & & Credit & &