Question 1

Neil and Paul formed a partnership.During the year,Neil and Paul withdrew $13,000 and $6,000,respectively.Provide the journal entry to close the withdrawal accounts.

Accepted Answer

The answer of Neil and Paul formed a partnership.During the...

Question 2

Albert,Billy,and Cathy share profits and losses of their partnership in a 1:6:3,ratio respectively.If the net income is $60,000,calculate Billy's share of the profits.

Accepted Answer

A) $12,000 
B) $18,000 
C) $36,000 
D) $6,000 
A) $12,000 
B) $18,000 
C) $36,000 
D) $6,000

Question 3

Which of the following is true of limited partners in a limited partnership?

Accepted Answer

A) They have limited liability for the debts of the business but their potential for profits is unlimited. 
B) They usually have first claim to profits and losses made by the business. 
C) They assume the same operational duties as that of the general partner. 
D) They have to assume a liability beyond their contribution in the business in the event of a bankruptcy. 
A) They have limited liability for the debts of the business but their potential for profits is unlimited. 
B) They usually have first claim to profits and losses made by the business. 
C) They assume the same operational duties as that of the general partner. 
D) They have to assume a liability beyond their contribution in the business in the event of a bankruptcy.

Question 4

Which of the following will result in the dissolution of a partnership?

Accepted Answer

A) admission of a new partner 
B) purchase of plant assets for the business 
C) contribution of an asset by an existing partner 
D) a partner's withdrawal of cash from the partnership 
A) admission of a new partner 
B) purchase of plant assets for the business 
C) contribution of an asset by an existing partner 
D) a partner's withdrawal of cash from the partnership

Question 5

Frank and Harry are partners.Frank has a capital balance of $51,000 and Harry has a capital balance of $40,000.Bill invested a building worth $27,000 to the partnership for an ownership interest of 20%.Calculate Bill's capital in the new partnership.

Accepted Answer

A) $13,000 
B) $27,000 
C) $24,000 
D) $23,600 
A) $13,000 
B) $27,000 
C) $24,000 
D) $23,600

Question 6

When a new partner enters into a partnership by purchasing an existing partner's interests,the total assets and equity of the business increase.

Accepted Answer

A) True 
 B)False

Question 7

Simonsen,Paulson,and Richardson are partners in a firm with the following capital account balances:
 
Paulson is retiring from the partnership on December 31,2017.The profit-and-loss-sharing ratio among Simonsen,Paulson,and Richardson is 1:3:2,in the order given.Paulson is paid $100,000 cash in full compensation for her capital account balance.Which of the following journal entries would the firm record for this transaction?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 8

The statement of partners' equity shows the changes in each partner's capital account for a specific period of time.

Accepted Answer

A) True 
 B)False

Question 9

Ruby and Anita are partners.Ruby has a capital balance of $270,000 and Anita has a capital balance of $180,000.Denis invests a building with a current market value of $170,000 to acquire an interest in the new partnership.Which of the following is true of the journal entry to record this transaction? (Assume no bonus to any partner. )

Accepted Answer

A) Building will be debited for $170,000,Ruby,Capital and Anita,Capital will be credited for $85,000 each. 
B) Building will be debited for $170,000 and Denis,Capital will be credited for $170,000. 
C) Ruby,Capital and Anita,Capital will be debited for $85,000 each and Denis,Capital will be credited for $170,000. 
D) Ruby,Capital and Anita,Capital will be credited for $85,000 each and Denis,Capital will be debited for $170,000. 
A) Building will be debited for $170,000,Ruby,Capital and Anita,Capital will be credited for $85,000 each. 
B) Building will be debited for $170,000 and Denis,Capital will be credited for $170,000. 
C) Ruby,Capital and Anita,Capital will be debited for $85,000 each and Denis,Capital will be credited for $170,000. 
D) Ruby,Capital and Anita,Capital will be credited for $85,000 each and Denis,Capital will be debited for $170,000.

Question 10

Jack holds an ownership interest of 63% and Teresa holds an ownership interest of 37% in the J and T Partnership.This year,in order to further develop the business,Jack contributes an additional $6,800 and Teresa contributes an additional $3,200 to the partnership.Which of the following is true of this scenario?

Accepted Answer

A) Either the total contribution of $10,000 or the contribution in relationship to the ownership interest ratio will be recorded. 
B) Only the total contribution of $10,000 will be recorded. 
C) Individual contribution of $6,800 by Jack and $3,200 by Teresa will be recorded. 
D) 63% of Jack's contribution and 37% of Teresa's contribution will be recorded. 
A) Either the total contribution of $10,000 or the contribution in relationship to the ownership interest ratio will be recorded. 
B) Only the total contribution of $10,000 will be recorded. 
C) Individual contribution of $6,800 by Jack and $3,200 by Teresa will be recorded. 
D) 63% of Jack's contribution and 37% of Teresa's contribution will be recorded.

Question 11

Which of the following businesses is most likely to be organized as an LLP?

Accepted Answer

A) a bookstore run by two partners 
B) an international retail chain 
C) an accounting firm run by two partners 
D) a stationery store owned by an individual 
A) a bookstore run by two partners 
B) an international retail chain 
C) an accounting firm run by two partners 
D) a stationery store owned by an individual

Question 12

Simonsen,Paulson,and Richardson are partners in a firm with the following capital account balances:
 
The profit-and-loss-sharing ratio among Simonsen,Paulson,and Richardson is 1:3:2,in the order given.Paulson is retiring from the partnership on December 31,2017.Paulson is paid $230,000 cash in full compensation for her capital account balance.Which of the following is true of the journal entry prepared at the time of retirement?

Accepted Answer

A) Debit Paulson's capital account by $230,000. 
B) Debit Richardson's capital account by $35,000. 
C) Debit Simonsen's capital account by $23,333. 
D) Debit Income Summary by $70,000. 
A) Debit Paulson's capital account by $230,000. 
B) Debit Richardson's capital account by $35,000. 
C) Debit Simonsen's capital account by $23,333. 
D) Debit Income Summary by $70,000.

Question 13

Which of the following is specified in the articles of partnership?

Accepted Answer

A) procedures for withdrawal of assets by the partners 
B) procedures for distribution of dividends 
C) methods for valuation of the assets 
D) selection of an appropriate depreciation method 
A) procedures for withdrawal of assets by the partners 
B) procedures for distribution of dividends 
C) methods for valuation of the assets 
D) selection of an appropriate depreciation method

Question 14

Which of the following is true of the assets of a partnership?

Accepted Answer

A) The partner who is more actively involved in the daily business affairs is considered to be the sole owner of the partnership's assets. 
B) Any new assets purchased by the partnership are jointly owned by each partner. 
C) When a partner contributes a particular asset to the firm,he is considered to be the sole owner of the asset. 
D) In case of liquidation of assets,the partners must be paid based on the profit sharing ratio of the partnership. 
A) The partner who is more actively involved in the daily business affairs is considered to be the sole owner of the partnership's assets. 
B) Any new assets purchased by the partnership are jointly owned by each partner. 
C) When a partner contributes a particular asset to the firm,he is considered to be the sole owner of the asset. 
D) In case of liquidation of assets,the partners must be paid based on the profit sharing ratio of the partnership.

Question 15

Which of the following is true of a partnership?

Accepted Answer

A) All partnership firms are public firms. 
B) Partnership firms have a limited life. 
C) The owners of the partnership have limited liabilities for the partnership's debts. 
D) The maximum loss an owner of a partnership can incur is the invested amount. 
A) All partnership firms are public firms. 
B) Partnership firms have a limited life. 
C) The owners of the partnership have limited liabilities for the partnership's debts. 
D) The maximum loss an owner of a partnership can incur is the invested amount.

Question 16

The income of a limited liability company cannot be taxed to the members as though they were partners.

Accepted Answer

A) True 
 B)False

Question 17

In comparison to a corporation,the owners of a general partnership ________.

Accepted Answer

A) have limited claim on the profits generated by the business 
B) are restricted from dissolving the business without prior notice to the SEC 
C) have an unlimited personal liability for the debts of the business 
D) are taxed at two levels 
A) have limited claim on the profits generated by the business 
B) are restricted from dissolving the business without prior notice to the SEC 
C) have an unlimited personal liability for the debts of the business 
D) are taxed at two levels

Question 18

Andre,Beau,and Caroline share profits and losses of their partnership in a 3:3:7 ratio respectively.If the net income is $900,000,calculate Caroline's share of the profits.

Accepted Answer

A) $207,692 
B) $484,615 
C) $161,538 
D) $69,231 
A) $207,692 
B) $484,615 
C) $161,538 
D) $69,231

Question 19

In a general partnership,if one partner cannot pay his or her part of the debts,the other partner or partners must pay the total.

Accepted Answer

A) True 
 B)False

Question 20

Upon liquidation of a partnership,gains and losses on the sale of assets are divided according to the partner's capital balances.

Accepted Answer

A) True 
 B)False

Exam 12: Partnerships

Neil and Paul formed a partnership.During the year,Neil and Paul withdrew $13,000 and $6,000,respectively.Provide the journal entry to close the withdrawal accounts.

Albert,Billy,and Cathy share profits and losses of their partnership in a 1:6:3,ratio respectively.If the net income is $60,000,calculate Billy's share of the profits.

Which of the following is true of limited partners in a limited partnership?

Which of the following will result in the dissolution of a partnership?

Frank and Harry are partners.Frank has a capital balance of $51,000 and Harry has a capital balance of $40,000.Bill invested a building worth $27,000 to the partnership for an ownership interest of 20%.Calculate Bill's capital in the new partnership.

When a new partner enters into a partnership by purchasing an existing partner's interests,the total assets and equity of the business increase.

The statement of partners' equity shows the changes in each partner's capital account for a specific period of time.

Which of the following businesses is most likely to be organized as an LLP?

Which of the following is specified in the articles of partnership?

Which of the following is true of the assets of a partnership?

Which of the following is true of a partnership?

The income of a limited liability company cannot be taxed to the members as though they were partners.

In comparison to a corporation,the owners of a general partnership ________.

Andre,Beau,and Caroline share profits and losses of their partnership in a 3:3:7 ratio respectively.If the net income is $900,000,calculate Caroline's share of the profits.

In a general partnership,if one partner cannot pay his or her part of the debts,the other partner or partners must pay the total.

Upon liquidation of a partnership,gains and losses on the sale of assets are divided according to the partner's capital balances.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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