Question 1

Which of the following partnership characteristics is an advantage?

Accepted Answer

A) Mutual agency 
B) Ease of dissolution 
C) Unlimited liability 
D) Limited life 
A) Mutual agency 
B) Ease of dissolution 
C) Unlimited liability 
D) Limited life

Question 2

When a partner invests a noncash asset into the partnership,the partner's Capital account is debited and an asset account is credited.

Accepted Answer

A) True 
 B)False

Question 3

When individuals invest property in a partnership,the property becomes an asset of the partnership and is owned jointly by the partners.

Accepted Answer

A) True 
 B)False

Question 4

If a partnership agreement does not specify how income and losses are to be distributed,the partners share them equally.

Accepted Answer

A) True 
 B)False

Question 5

The death of a partner dissolves the partnership.

Accepted Answer

A) True 
 B)False

Question 6

A partnership agreement need not be in writing.

Accepted Answer

A) True 
 B)False

Question 7

In a liquidation,partners are given back the assets that they originally invested.

Accepted Answer

A) True 
 B)False

Question 8

When a new partner invests less than the proportionate share he or she receives in the partnership,a bonus is recorded to his or her account.

Accepted Answer

A) True 
 B)False

Question 9

Liquidation of a partnership is the process of ending the business.

Accepted Answer

A) True 
 B)False

Question 10

Income or loss can be allocated to partners based solely on average capital balances.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following describes a limited liability company?

Accepted Answer

A) Entities with limited lives that a company creates to achieve a specific objective. 
B) An association of two or more entities for the purpose of achieving a specific goal. 
C) Corporations that U.S.tax laws treat as partnerships,and they do not pay income taxes. 
D) A special type of partnership that confines the limited partner's potential loss to the amount of his or her investment. 
A) Entities with limited lives that a company creates to achieve a specific objective. 
B) An association of two or more entities for the purpose of achieving a specific goal. 
C) Corporations that U.S.tax laws treat as partnerships,and they do not pay income taxes. 
D) A special type of partnership that confines the limited partner's potential loss to the amount of his or her investment.

Question 12

A partnership agreement should include

Accepted Answer

A) the method of allocating profits and losses. 
B) investments of each partner. 
C) procedures for admitting partners. 
D) All of these choices. 
A) the method of allocating profits and losses. 
B) investments of each partner. 
C) procedures for admitting partners. 
D) All of these choices.

Question 13

A partnership is relatively easy to form,but is very complex to dissolve.

Accepted Answer

A) True 
 B)False

Question 14

A partnership need not obtain permission from the state before it legally conducts business.

Accepted Answer

A) True 
 B)False

Question 15

Joan contributes cash of $48,000,and Jamie contributes office equipment that cost $40,000 but is valued at $32,000 to the formation of a new partnership.The entry to record the investments in the partnership is:

Accepted Answer

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

Question 16

When a new partner is admitted,it will dissolve the old partnership.

Accepted Answer

A) True 
 B)False

Question 17

The most appropriate place to look for relationships among partners is in the

Accepted Answer

A) partnership agreement 
B) accounting records 
C) relevant state law 
D) voluntary association 
A) partnership agreement 
B) accounting records 
C) relevant state law 
D) voluntary association

Question 18

Gains and losses on the sale of assets in a liquidation are divided among partners according to the stated ratios.

Accepted Answer

A) True 
 B)False

Question 19

A partnership is liquidated when a new partner is admitted to the partnership.

Accepted Answer

A) True 
 B)False

Question 20

In a partnership liquidation,

Accepted Answer

A) creditors should be paid before partners 
B) gains and losses on the sale of assets are allocated to the partners on the basis of their current capital balances 
C) the last entry credits the partners' Capital accounts 
D) the partners' accounts are settled on the basis of the stated ratios 
A) creditors should be paid before partners 
B) gains and losses on the sale of assets are allocated to the partners on the basis of their current capital balances 
C) the last entry credits the partners' Capital accounts 
D) the partners' accounts are settled on the basis of the stated ratios

Exam 12: Accounting for Partnerships

Which of the following partnership characteristics is an advantage?

When a partner invests a noncash asset into the partnership,the partner's Capital account is debited and an asset account is credited.

When individuals invest property in a partnership,the property becomes an asset of the partnership and is owned jointly by the partners.

If a partnership agreement does not specify how income and losses are to be distributed,the partners share them equally.

The death of a partner dissolves the partnership.

A partnership agreement need not be in writing.

In a liquidation,partners are given back the assets that they originally invested.

When a new partner invests less than the proportionate share he or she receives in the partnership,a bonus is recorded to his or her account.

Liquidation of a partnership is the process of ending the business.

Income or loss can be allocated to partners based solely on average capital balances.

Which of the following describes a limited liability company?

A partnership agreement should include

A partnership is relatively easy to form,but is very complex to dissolve.

A partnership need not obtain permission from the state before it legally conducts business.

Joan contributes cash of $48,000,and Jamie contributes office equipment that cost $40,000 but is valued at $32,000 to the formation of a new partnership.The entry to record the investments in the partnership is:

When a new partner is admitted,it will dissolve the old partnership.

The most appropriate place to look for relationships among partners is in the

Gains and losses on the sale of assets in a liquidation are divided among partners according to the stated ratios.

A partnership is liquidated when a new partner is admitted to the partnership.

In a partnership liquidation,

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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