Question 1

An advantage of the partnership form of business is that the life of the partnership is limited.

Accepted Answer

A) True 
 B)False

Question 2

If liquidation of a partnership results in a negative balance in a partner's account,the partner must pay into the partnership the amount of the negative balance.

Accepted Answer

A) True 
 B)False

Question 3

A partnership agreement should include the method of distributing income and loss.

Accepted Answer

A) True 
 B)False

Question 4

It is possible to invest no tangible assets into a partnership,yet be given a positive opening capital balance.

Accepted Answer

A) True 
 B)False

Question 5

In a liquidation,the liabilities of the partnership should be paid

Accepted Answer

A) after a revaluation of assets 
B) before any sales of assets 
C) before the distribution of cash to partners 
D) before the distribution of gains and losses on the disposal of assets 
A) after a revaluation of assets 
B) before any sales of assets 
C) before the distribution of cash to partners 
D) before the distribution of gains and losses on the disposal of assets

Question 6

A limited partnership

Accepted Answer

A) allows some partners to limit their loss to the amount of his or her investment. 
B) has an agreed-upon limited life. 
C) is a corporation that U.S.tax laws treat as a partnership. 
D) is a firm with a limited life that a company creates to achieve a specific objective,such as raising money by selling receivables. 
A) allows some partners to limit their loss to the amount of his or her investment. 
B) has an agreed-upon limited life. 
C) is a corporation that U.S.tax laws treat as a partnership. 
D) is a firm with a limited life that a company creates to achieve a specific objective,such as raising money by selling receivables.

Question 7

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 8

The ability of a partner to enter into a contract on behalf of all partners is called

Accepted Answer

A) the partnership agreement 
B) voluntary association 
C) mutual agency 
D) unlimited liability 
A) the partnership agreement 
B) voluntary association 
C) mutual agency 
D) unlimited liability

Question 9

After selling all the assets and paying the liabilities in a liquidation of a partnership,the partners share any remaining cash according to the stated ratios.

Accepted Answer

A) True 
 B)False

Question 10

The potential loss of all partners in an ordinary partnership is limited only by personal bankruptcy laws.

Accepted Answer

A) True 
 B)False

Question 11

When a loss is closed into the partners' Capital accounts,Income Summary is debited.

Accepted Answer

A) True 
 B)False

Question 12

It is possible for a partner's Capital account to increase even if a net loss occurs.

Accepted Answer

A) True 
 B)False

Question 13

One of the benefits of forming a partnership is limited liability.

Accepted Answer

A) True 
 B)False

Question 14

Noncash assets invested into a partnership are recorded at

Accepted Answer

A) their fair market value 
B) their carrying value 
C) zero 
D) their original cost 
A) their fair market value 
B) their carrying value 
C) zero 
D) their original cost

Question 15

Which of the following does not result in the dissolution of a partnership?

Accepted Answer

A) Death of a partner 
B) Admission of a new partner 
C) Withdrawal of a partner 
D) Sale of partnership assets 
A) Death of a partner 
B) Admission of a new partner 
C) Withdrawal of a partner 
D) Sale of partnership assets

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Which of the following describes a joint venture?

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 18

If the asset accounts did not reflect their current values,the asset accounts would need to be adjusted before admitting the new partner.

Accepted Answer

A) True 
 B)False

Question 19

Fred,Kristina,and Nick each receive a $14,000 salary,as well as 15 percent interest on their respective average investments of $40,000,$20,000,and $80,000.If they share remaining income and losses in a 4:3:2 ratio,respectively,by how much would Nick's account increase or decrease (indicate a decrease by placing parentheses around the amount),assuming (a)net income of $81,000,(b)net income of $54,000,and (c)net loss of $63,000.

Accepted Answer

a.$30,000

Question 20

Which of the following statements is correct regarding partnerships?

Accepted Answer

A) Accounting for a partnership is similar to accounting for a corporation. 
B) If the partnership assumes a liability related to an asset invested in the partnership,the partner's capital account is credited and a liability account is debited. 
C) It is necessary to maintain separate Capital and Withdrawals accounts for each partner. 
D) All of these choices. 
A) Accounting for a partnership is similar to accounting for a corporation. 
B) If the partnership assumes a liability related to an asset invested in the partnership,the partner's capital account is credited and a liability account is debited. 
C) It is necessary to maintain separate Capital and Withdrawals accounts for each partner. 
D) All of these choices.

An advantage of the partnership form of business is that the life of the partnership is limited.

If liquidation of a partnership results in a negative balance in a partner's account,the partner must pay into the partnership the amount of the negative balance.

A partnership agreement should include the method of distributing income and loss.

It is possible to invest no tangible assets into a partnership,yet be given a positive opening capital balance.

In a liquidation,the liabilities of the partnership should be paid

A limited partnership

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

The ability of a partner to enter into a contract on behalf of all partners is called

After selling all the assets and paying the liabilities in a liquidation of a partnership,the partners share any remaining cash according to the stated ratios.

The potential loss of all partners in an ordinary partnership is limited only by personal bankruptcy laws.

When a loss is closed into the partners' Capital accounts,Income Summary is debited.

It is possible for a partner's Capital account to increase even if a net loss occurs.

One of the benefits of forming a partnership is limited liability.

Noncash assets invested into a partnership are recorded at

Which of the following does not result in the dissolution of a partnership?

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

Which of the following describes a joint venture?

If the asset accounts did not reflect their current values,the asset accounts would need to be adjusted before admitting the new partner.

Which of the following statements is correct regarding partnerships?

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

Supplement: 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

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters

Exam 12: Accounting for Partnerships

An advantage of the partnership form of business is that the life of the partnership is limited.

If liquidation of a partnership results in a negative balance in a partner's account,the partner must pay into the partnership the amount of the negative balance.

A partnership agreement should include the method of distributing income and loss.

It is possible to invest no tangible assets into a partnership,yet be given a positive opening capital balance.

In a liquidation,the liabilities of the partnership should be paid

A limited partnership

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

The ability of a partner to enter into a contract on behalf of all partners is called

After selling all the assets and paying the liabilities in a liquidation of a partnership,the partners share any remaining cash according to the stated ratios.

The potential loss of all partners in an ordinary partnership is limited only by personal bankruptcy laws.

When a loss is closed into the partners' Capital accounts,Income Summary is debited.

It is possible for a partner's Capital account to increase even if a net loss occurs.

One of the benefits of forming a partnership is limited liability.

Noncash assets invested into a partnership are recorded at

Which of the following does not result in the dissolution of a partnership?

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

Which of the following describes a joint venture?

If the asset accounts did not reflect their current values,the asset accounts would need to be adjusted before admitting the new partner.

Which of the following statements is correct regarding partnerships?

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

Supplement: 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

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters