Question 1

The life of a partnership is ____________________ in duration.

Accepted Answer

The answer of The life of a partnership is ____________________...

Question 2

S. Reising contributed $48,000 in cash plus equipment valued at $73,000 to the Reising Construction Partnership. The journal entry to record the transaction for the partnership is:

Accepted Answer

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

Question 3

Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

Accepted Answer

A) True 
 B)False

Question 4

A capital deficiency exists when all partners have a credit balance in their capital accounts.

Accepted Answer

A) True 
 B)False

Question 5

Discuss the options for the allocation of income and loss among partners, including with and without a partnership agreement.

Accepted Answer

In the absence of a partnership agreemen

Question 6

Brown and Rubix are partners. Brown's capital balance in the partnership is $73,000 and Rubix's capital balance is $62,000. Brown and Rubix have agreed to share equally in income or loss. Brown and Rubix agree to accept Cabela with a 20% interest. Cabela will invest $41,500 in the partnership. The bonus that is granted to Brown and Rubix equals:

Accepted Answer

A)  $3,100 each. 
B)  $6,200 each. 
C)  $35,300 in total. 
D)  $41,500 in total. 
E)  $0, because Brown and Rubix actually grant a bonus to Cabela. 
A)  $3,100 each. 
B)  $6,200 each. 
C)  $35,300 in total. 
D)  $41,500 in total. 
E)  $0, because Brown and Rubix actually grant a bonus to Cabela.

Question 7

Tanner, Schmidt, and Hayes are partners with capital account balances of $100,000, $120,000, and $96,000 respectively. They share profits and losses in a 3:4:3 ratio. Schmidt wishes to leave the partnership and will be paid $125,000. What are the remaining capital account balances after Schmidt withdraws?

Accepted Answer

A)  Tanner $95,500; Hayes $95,500. 
B)  Tanner $102,500; Hayes $98,500. 
C)  Tanner $100,000; Hayes $96,000. 
D)  Tanner $97,500; Hayes $93,500. 
E)  Tanner $100,000; Hayes $91,000. 
A)  Tanner $95,500; Hayes $95,500. 
B)  Tanner $102,500; Hayes $98,500. 
C)  Tanner $100,000; Hayes $96,000. 
D)  Tanner $97,500; Hayes $93,500. 
E)  Tanner $100,000; Hayes $91,000.

Question 8

What are the ways a partner can withdraw from a partnership? Explain how to account for the withdrawal of a current partner from a partnership.

Accepted Answer

A partner may sell his or her interest i

Question 9

Sierra and Jenson formed a partnership. Sierra contributed $25,000 cash and accounts receivable worth $11,000. Jenson's investment included cash, $5,000; inventory, $18,000; and supplies, $1,000. Prepare the journal entries to record each partner's investment in the new partnership.

Accepted Answer

The answer of Sierra and Jenson formed a partnership. Sierra...

Question 10

Chen and Wright are forming a partnership. Chen will invest a building that currently is being used by another business owned by Chen. The building has a market value of $90,000. Also, the partnership will assume responsibility for a $30,000 note secured by a mortgage on that building. Wright will invest $50,000 cash. For the partnership, the amounts to be recorded for the building and for Chen's Capital account are:

Accepted Answer

A)  Building, $90,000 and Chen, Capital, $90,000. 
B)  Building, $60,000 and Chen, Capital, $60,000. 
C)  Building, $60,000 and Chen, Capital, $50,000. 
D)  Building, $90,000 and Chen, Capital, $60,000. 
E)  Building, $60,000 and Chen, Capital, $90,000. 
A)  Building, $90,000 and Chen, Capital, $90,000. 
B)  Building, $60,000 and Chen, Capital, $60,000. 
C)  Building, $60,000 and Chen, Capital, $50,000. 
D)  Building, $90,000 and Chen, Capital, $60,000. 
E)  Building, $60,000 and Chen, Capital, $90,000.

Question 11

The withdrawals account of each partner is closed to retained earnings at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 12

Rodriguez, Sate, and Melton are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are Rodriguez, $30,000; Sate, $30,000; and Melton, $(4,000). After all the assets are sold and liabilities are paid, but before any contributions are considered to cover any deficiencies, there is $56,000 in cash to be distributed. Melton pays $4,000 to cover the deficiency in her account. The general journal entry to record the final distribution would be:

Accepted Answer

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

Question 13

What are the ways that a new partner can be admitted to an existing partnership? Explain how to account for the admission of the new partner under each of these circumstances.

Accepted Answer

A new partner may purchase a partnership

Question 14

Armstrong withdraws from the FAP Partnership. The remaining partners agree to buy out her share for her capital balance of $35,000. Prepare the journal entry to record the withdrawal from the partnership.

Accepted Answer

The answer of Armstrong withdraws from the FAP Partnership. The...

Question 15

The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner.

Accepted Answer

A) True 
 B)False

Question 16

Match between columns
                        Premises:  An unincorporated association of two or more persons to pursue a business for profit as co-owners.
 The agreement between partners that sets terms under which the affairs of the partnership are conducted.
 A financial statement that shows total capital balances at the beginning of the period, any additional investment by partners, the income or loss of the period, the partners' withdrawals and the ending capital balances.
 The legal relationship among general partners that makes each of them responsible for paying the debts of the partnership if the other partners are unable to pay their shares.
 A corporation that meets special tax qualifications so as to be treated like a partnership for income tax purposes.
 A partner who assumes unlimited liability for the debts of the partnership.
 A corporation that does not qualify for and elect to be treated like a partnership for income tax purposes and therefore is subject to income taxes.
 A partnership that has two classes of partners, limited partners and general partners. Limited partners have no personal liability beyond the amount they invest in the partnership and have no active role except as specified in the partnership agreement.
 A partnership that protects innocent partners from malpractice or negligence claims resulting from the acts of another partner.
 The legal relationship among partners whereby each partner can commit or bind the partnership to any contract within the scope of the partnership's business.

Accepted Answer

The Answer of Statement of changes in partner’s equity and is...

Question 17

Khalid, Dina, and James are partners with beginning-year capital balances of $400,000, $320,000, and $160,000, respectively. The partners agreed to share income and loss as follows: salary of $30,000 to Khalid; $50,000 to Dina; and $55,000 to James and an interest allowance of 10% on beginning-of-year capital balances. Any remaining balance is to be divided equally. If partnership net income for the year is $190,000, determine each partner's share and make the appropriate journal entry to close the Income Summary to the capital accounts.

Accepted Answer

The answer of Khalid, Dina, and James are partners with...

Question 18

A relatively new form of business organization that protects partners with limited liability, allows limited partners to assume an active management role, and is taxed as a partnership is a ______________________________.

Accepted Answer

limited li

Question 19

In the absence of a partnership agreement, the law says that income of a partnership will be shared equally by the partners.

Accepted Answer

A) True 
 B)False

Question 20

Partners in a partnership are taxed on the amounts they withdraw from the partnership, not the partnership income.

Accepted Answer

A) True 
 B)False

The life of a partnership is ____________________ in duration.

S. Reising contributed $48,000 in cash plus equipment valued at $73,000 to the Reising Construction Partnership. The journal entry to record the transaction for the partnership is:

Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

A capital deficiency exists when all partners have a credit balance in their capital accounts.

Discuss the options for the allocation of income and loss among partners, including with and without a partnership agreement.

What are the ways a partner can withdraw from a partnership? Explain how to account for the withdrawal of a current partner from a partnership.

Sierra and Jenson formed a partnership. Sierra contributed $25,000 cash and accounts receivable worth $11,000. Jenson's investment included cash, $5,000; inventory, $18,000; and supplies, $1,000. Prepare the journal entries to record each partner's investment in the new partnership.

The withdrawals account of each partner is closed to retained earnings at the end of the accounting period.

What are the ways that a new partner can be admitted to an existing partnership? Explain how to account for the admission of the new partner under each of these circumstances.

Armstrong withdraws from the FAP Partnership. The remaining partners agree to buy out her share for her capital balance of $35,000. Prepare the journal entry to record the withdrawal from the partnership.

The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner.

A relatively new form of business organization that protects partners with limited liability, allows limited partners to assume an active management role, and is taxed as a partnership is a ______________________________.

In the absence of a partnership agreement, the law says that income of a partnership will be shared equally by the partners.

Partners in a partnership are taxed on the amounts they withdraw from the partnership, not the partnership income.

Introducing Financial Accounting

Accounting for Transactions

Preparing Financial Statements

Accounting for Merchandising Operations

Accounting for Inventories

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Investments and International Operations

Accounting With Special Journals

Filters

Exam 16: Accounting for Partnerships

The life of a partnership is ____________________ in duration.

S. Reising contributed $48,000 in cash plus equipment valued at $73,000 to the Reising Construction Partnership. The journal entry to record the transaction for the partnership is:

Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

A capital deficiency exists when all partners have a credit balance in their capital accounts.

Discuss the options for the allocation of income and loss among partners, including with and without a partnership agreement.

What are the ways a partner can withdraw from a partnership? Explain how to account for the withdrawal of a current partner from a partnership.

Sierra and Jenson formed a partnership. Sierra contributed $25,000 cash and accounts receivable worth $11,000. Jenson's investment included cash, $5,000; inventory, $18,000; and supplies, $1,000. Prepare the journal entries to record each partner's investment in the new partnership.

The withdrawals account of each partner is closed to retained earnings at the end of the accounting period.

What are the ways that a new partner can be admitted to an existing partnership? Explain how to account for the admission of the new partner under each of these circumstances.

Armstrong withdraws from the FAP Partnership. The remaining partners agree to buy out her share for her capital balance of $35,000. Prepare the journal entry to record the withdrawal from the partnership.

The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner.

A relatively new form of business organization that protects partners with limited liability, allows limited partners to assume an active management role, and is taxed as a partnership is a ______________________________.

In the absence of a partnership agreement, the law says that income of a partnership will be shared equally by the partners.

Partners in a partnership are taxed on the amounts they withdraw from the partnership, not the partnership income.

Introducing Financial Accounting

Accounting for Transactions

Preparing Financial Statements

Accounting for Merchandising Operations

Accounting for Inventories

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Investments and International Operations

Accounting With Special Journals

Filters