Matching
Match the items below by entering the appropriate code letter in the space provided.
Premises:
Explains changes in individual partner's capital accounts during a period.
The basis for sharing profit and losses
Total net assets and total capital of the partnership do not change.
Written or verbal contract establishing duties and responsibilities of partners
The sale of noncash assets
Results in an increase in total net assets and total capital of the partnership.
Ends both the legal and economic life of the entity
Each partner can bind the partnership so long as the action appears to be appropriate for the partnership.
Capital account with a debit balance
Each partner is personally and individually liable for partnership debts.
Responses:
Profit ratio
Realization
Purchase of an interest
Statement of Partners' Equity
Unlimited liability
Partnership liquidation
Admission by investment
Capital deficiency
Mutual agency
Partnership agreement
Correct Answer:
Premises:
Responses:
Explains changes in individual partner's capital accounts during a period.
The basis for sharing profit and losses
Total net assets and total capital of the partnership do not change.
Written or verbal contract establishing duties and responsibilities of partners
The sale of noncash assets
Results in an increase in total net assets and total capital of the partnership.
Ends both the legal and economic life of the entity
Each partner can bind the partnership so long as the action appears to be appropriate for the partnership.
Capital account with a debit balance
Each partner is personally and individually liable for partnership debts.
Premises:
Explains changes in individual partner's capital accounts during a period.
The basis for sharing profit and losses
Total net assets and total capital of the partnership do not change.
Written or verbal contract establishing duties and responsibilities of partners
The sale of noncash assets
Results in an increase in total net assets and total capital of the partnership.
Ends both the legal and economic life of the entity
Each partner can bind the partnership so long as the action appears to be appropriate for the partnership.
Capital account with a debit balance
Each partner is personally and individually liable for partnership debts.
Responses:
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