Question 1

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

Question 2

In a limited partnership

Accepted Answer

A) the general partners have limited liability 
B) all partners have limited liability 
C) all but the general partners have unlimited liability 
D) all but the general partners have limited liability

Question 3

Partners A and B receive a salary of $16,000 and $14,000,respectively.They agree to share income and losses equally.If the partnership has income of $280,000 in 20x5,the entry to close the income into their capital accounts is:

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 4

Avery and Bert are partners who share profits and losses in a ratio of 2:1 and have capital balances of $75,000 and $150,000,respectively.The partners agree to admit Carmen to the partnership.Carmen invests $75,000 for a 35 percent interest in the partnership.The new total capital balance after admitting Carmen is $300,000.The entry to record the admission of Carmen to the partnership is:

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 5

Warren and Spencer are partners in a drilling operation.Warren purchased a drilling rig to be used in the partnership's operations.Is this purchase binding on Spencer even though he was not involved in it? Explain your answer.

Accepted Answer

The answer of Warren and Spencer are partners in a...

Question 6

Partnership liquidation is not the same as partnership dissolution.

Accepted Answer

A) True 
 B)False

Question 7

When a partner leaves a partnership,it is possible that total assets will be unaffected.

Accepted Answer

A) True 
 B)False

Question 8

There is no income tax imposed on a partnership.

Accepted Answer

A) True 
 B)False

Question 9

Anne,Barb,and Cathy are partners who share profits and losses in a ratio of 3:1:2,respectively.Cathy's Capital account has a $100,000 balance.Anne and Barb have agreed to let Cathy take $124,000 of the company's cash when she retires.Prepare an entry in journal form without explanation to record Cathy's exit,including the recognition of a bonus to Cathy.

Accepted Answer

The answer of Anne,Barb,and Cathy are partners who share profits...

Question 10

Which of the following is incorrect regarding partnerships?

Accepted Answer

A) Legally,there is no economic separation between a partnership and its owners. 
B) A partnership is a voluntary association of individuals. 
C) If the partnership agreement does not describe the method of income and loss distribution,the partners must share income and losses equally. 
D) When individuals invest property in a partnership,they co-own the property with the partnership.

Question 11

When a partner withdraws from a partnership,an audit might be performed and the assets reappraised.

Accepted Answer

A) True 
 B)False

Question 12

Income and losses are divided equally among the partners unless the partnership agreement specifies otherwise.

Accepted Answer

A) True 
 B)False

Question 13

List four advantages and four disadvantages of the partnership form of business.

Accepted Answer

The answer of List four advantages and four disadvantages of...

Question 14

Justin and Nicole are forming a partnership.What are some of the factors they should consider in deciding how income might be divided?

Accepted Answer

The answer of Justin and Nicole are forming a partnership.What...

Question 15

Jordan,Kyle,and Noah have equities in a partnership of $100,000,$160,000,and $140,000,respectively,and share income and losses in a ratio of 5:3:2,respectively.The partners have agreed to admit Billy to the partnership.Prepare entries in journal form without explanations to record the admission of Billy to the partnership under each of the following assumptions:
a.Billy invests $80,000 for a 25 percent interest,and a bonus is recorded for Billy.
b.Billy invests $160,000 for a one-fifth interest,and a bonus is recorded for the old partners.

Accepted Answer

The answer of Jordan,Kyle,and Noah have equities in a partnership...

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

April and Cammy are partners who have agreed to admit Elena,who will invest $30,000 for a 20 percent interest.The previous capital balances were $30,000 and $60,000 for April and Cammy,respectively.April and Cammy had shared profits and losses equally.The entry that records Elena's admission to the partnership is:

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 18

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

Question 19

In a limited partnership,the general partner's liability is unlimited.

Accepted Answer

A) True 
 B)False

Question 20

Partners A and B receive a salary of $30,000 and $60,000,respectively,and share income and losses in a 2:1 ratio,respectively.If the partnership suffers a $30,000 net loss in 20x5,the entry to close the income or loss into their capital accounts is:

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Exam 12: Accounting for Partnerships

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

In a limited partnership

Partners A and B receive a salary of $16,000 and $14,000,respectively.They agree to share income and losses equally.If the partnership has income of $280,000 in 20x5,the entry to close the income into their capital accounts is:

Warren and Spencer are partners in a drilling operation.Warren purchased a drilling rig to be used in the partnership's operations.Is this purchase binding on Spencer even though he was not involved in it? Explain your answer.

Partnership liquidation is not the same as partnership dissolution.

When a partner leaves a partnership,it is possible that total assets will be unaffected.

There is no income tax imposed on a partnership.

Which of the following is incorrect regarding partnerships?

When a partner withdraws from a partnership,an audit might be performed and the assets reappraised.

Income and losses are divided equally among the partners unless the partnership agreement specifies otherwise.

List four advantages and four disadvantages of the partnership form of business.

Justin and Nicole are forming a partnership.What are some of the factors they should consider in deciding how income might be divided?

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

Noncash assets invested into a partnership are recorded at

In a limited partnership,the general partner's liability is unlimited.

Partners A and B receive a salary of $30,000 and $60,000,respectively,and share income and losses in a 2:1 ratio,respectively.If the partnership suffers a $30,000 net loss in 20x5,the entry to close the income or loss into their capital accounts is: