Question 1

The equity section of the balance sheet of a partnership usually shows the individual capital account balance of each partner.

Accepted Answer

A) True 
 B)False

Question 2

A capital deficiency means that:

Accepted Answer

A)  The partnership has a loss. 
B)  The partnership has more liabilities than assets. 
C)  At least one partner has a debit balance in his/her capital account. 
D)  At least one partner has a credit balance in his/her capital account. 
E)  The partnership has been sold at a loss. 
A)  The partnership has a loss. 
B)  The partnership has more liabilities than assets. 
C)  At least one partner has a debit balance in his/her capital account. 
D)  At least one partner has a credit balance in his/her capital account. 
E)  The partnership has been sold at a loss.

Question 3

In a limited partnership the general partner has unlimited liability.

Accepted Answer

A) True 
 B)False

Question 4

If partners agree on how to share income,but say nothing about losses,then losses are shared ___________________.

Accepted Answer

In the sam

Question 5

Discuss the accounting issues involved in the admission or withdrawal of a partner from a partnership.

Accepted Answer

If a new partner purchases equity by inv

Question 6

Collins and Farina are forming a partnership.Collins is investing a building that has a fair market value of $70,000.However,the building is subject to a $36,000 mortgage.Farina is investing $20,000 cash.The amount to be credited to Collins' capital account is:

Accepted Answer

A)  $70,000. 
B)  $34,000. 
C)  $56,000. 
D)  $44,000. 
E)  $60,000. 
A)  $70,000. 
B)  $34,000. 
C)  $56,000. 
D)  $44,000. 
E)  $60,000.

Question 7

A partnership is an unincorporated association of two or more people to pursue a business for profit as co-owners.

Accepted Answer

A) True 
 B)False

Question 8

The statement of changes in equity shows the beginning balance in retained earnings,plus investments,less partners' withdrawals,the income or loss,and the ending balance in retained earnings.

Accepted Answer

A) True 
 B)False

Question 9

In closing the partnership accounts at the end of a period,the partners' capital accounts are credited for their share of the net loss or debited for their share of the net income.

Accepted Answer

A) True 
 B)False

Question 10

A partner can withdraw from a partnership by:

Accepted Answer

A)  Selling his/her interest to another person who pays for it in cash. 
B)  Selling his/her interest to another person who pays for it with non-cash assets. 
C)  Receiving cash or other assets of the partnership equal to the amount of his/her capital account. 
D)  Receiving cash or other assets of the partnership greater than the amount of his/her capital account. 
E)  All of these answers are correct. 
A)  Selling his/her interest to another person who pays for it in cash. 
B)  Selling his/her interest to another person who pays for it with non-cash assets. 
C)  Receiving cash or other assets of the partnership equal to the amount of his/her capital account. 
D)  Receiving cash or other assets of the partnership greater than the amount of his/her capital account. 
E)  All of these answers are correct.

Question 11

Zandusky invested $50,000 and Laurie invested $40,000 in a partnership and agreed to share income and losses by allowing a $5,000 annual salary allowance to Zandusky and a $6,000 annual salary allowance to Laurie.As well,each partner is to receive a share of net income equal to a 10% return on capital investments,and the balance is to be divided equally.Under this agreement,what are the shares of the partners if the partnership income is $65,000?

Accepted Answer

The answer of Zandusky invested $50,000 and Laurie invested $40,000...

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

If a partner is unable to cover a deficiency and the other partners absorb the deficiency,then that partner is thus relieved of all liability.

Accepted Answer

A) True 
 B)False

Question 14

Gillian and Emily invested $90,000 and $130,000,respectively,in a partnership they began one year ago.Assuming the partnership's net income was $250,000 for this year,calculate the share of the net income each partner should receive under the following assumptions.
(1)The partnership agreement specifies a salary allowance of $50,000 to Gillian and $60,000 to Emily,and the balance shared equally.
(2)The partnership agreement specifies a salary allowance of $45,000 to Gillian and $60,000 to Emily,10% interest on their investments,and the balance shared equally.

Accepted Answer

The answer of Gillian and Emily invested $90,000 and $130,000,respectively,in...

Question 15

The legal relationship among the partners whereby each partner is an agent of the partnership and is able to bind the partnership to contracts within the apparent scope of the partnership's business is called:

Accepted Answer

A)  Unlimited liability. 
B)  A partnership contract. 
C)  Mutual agency. 
D)  Preemptive right. 
E)  Voluntary association. 
A)  Unlimited liability. 
B)  A partnership contract. 
C)  Mutual agency. 
D)  Preemptive right. 
E)  Voluntary association.

Question 16

Explain the steps involved in the liquidation of a partnership.

Accepted Answer

Four steps are involved in the liquidati

Question 17

In the absence of a partnership agreement,the law says income/loss sharing should be based on:

Accepted Answer

A)  A fractional basis. 
B)  The ratio of capital investments. 
C)  Salary allowances. 
D)  Equal shares. 
E)  Interest allowances. 
A)  A fractional basis. 
B)  The ratio of capital investments. 
C)  Salary allowances. 
D)  Equal shares. 
E)  Interest allowances.

Question 18

Discuss the characteristics of partnerships and similar organizations.

Accepted Answer

Partnerships are unincorporated associat

Question 19

Explain the type of information needed to prepare journal entries to record the formation of a partnership.

Accepted Answer

When partners invest in a partnership,th

Question 20

The withdrawals account of each partner is:

Accepted Answer

A)  Credited when closed to his/her capital account. 
B)  Debited when closed to his/her capital account. 
C)  A permanent account and not closed. 
D)  Credited with his/her share of net income. 
E)  Debited with his/her share of net loss. 
A)  Credited when closed to his/her capital account. 
B)  Debited when closed to his/her capital account. 
C)  A permanent account and not closed. 
D)  Credited with his/her share of net income. 
E)  Debited with his/her share of net loss.

The equity section of the balance sheet of a partnership usually shows the individual capital account balance of each partner.

A capital deficiency means that:

In a limited partnership the general partner has unlimited liability.

If partners agree on how to share income,but say nothing about losses,then losses are shared ___________________.

Discuss the accounting issues involved in the admission or withdrawal of a partner from a partnership.

Collins and Farina are forming a partnership.Collins is investing a building that has a fair market value of $70,000.However,the building is subject to a $36,000 mortgage.Farina is investing $20,000 cash.The amount to be credited to Collins' capital account is:

A partnership is an unincorporated association of two or more people to pursue a business for profit as co-owners.

The statement of changes in equity shows the beginning balance in retained earnings,plus investments,less partners' withdrawals,the income or loss,and the ending balance in retained earnings.

In closing the partnership accounts at the end of a period,the partners' capital accounts are credited for their share of the net loss or debited for their share of the net income.

A partner can withdraw from a partnership by:

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

If a partner is unable to cover a deficiency and the other partners absorb the deficiency,then that partner is thus relieved of all liability.

The legal relationship among the partners whereby each partner is an agent of the partnership and is able to bind the partnership to contracts within the apparent scope of the partnership's business is called:

Explain the steps involved in the liquidation of a partnership.

In the absence of a partnership agreement,the law says income/loss sharing should be based on:

Discuss the characteristics of partnerships and similar organizations.

Explain the type of information needed to prepare journal entries to record the formation of a partnership.

The withdrawals account of each partner is:

Property,plant and Equipment,and Intangibles

Current Liabilities

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

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Exam 12: Partnerships

The equity section of the balance sheet of a partnership usually shows the individual capital account balance of each partner.

A capital deficiency means that:

In a limited partnership the general partner has unlimited liability.

If partners agree on how to share income,but say nothing about losses,then losses are shared ___________________.

Discuss the accounting issues involved in the admission or withdrawal of a partner from a partnership.

Collins and Farina are forming a partnership.Collins is investing a building that has a fair market value of $70,000.However,the building is subject to a $36,000 mortgage.Farina is investing $20,000 cash.The amount to be credited to Collins' capital account is:

A partnership is an unincorporated association of two or more people to pursue a business for profit as co-owners.

The statement of changes in equity shows the beginning balance in retained earnings,plus investments,less partners' withdrawals,the income or loss,and the ending balance in retained earnings.

In closing the partnership accounts at the end of a period,the partners' capital accounts are credited for their share of the net loss or debited for their share of the net income.

A partner can withdraw from a partnership by:

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

If a partner is unable to cover a deficiency and the other partners absorb the deficiency,then that partner is thus relieved of all liability.

The legal relationship among the partners whereby each partner is an agent of the partnership and is able to bind the partnership to contracts within the apparent scope of the partnership's business is called:

Explain the steps involved in the liquidation of a partnership.

In the absence of a partnership agreement,the law says income/loss sharing should be based on:

Discuss the characteristics of partnerships and similar organizations.

Explain the type of information needed to prepare journal entries to record the formation of a partnership.

The withdrawals account of each partner is:

Property,plant and Equipment,and Intangibles

Current Liabilities

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

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