Question 1

Indicate the account(s) to be debited and credited to record the following transactions.
-The business bought store equipment on account.
Debit ________ Credit ________

Accepted Answer

A) Cash 
B) Accounts receivable 
C) Allowance for doubtful accounts 
D) Merchandise inventory 
E) Store supplies
F)Store equipment
G)Accumulated depreciation
H)Notes payable
I)Accounts payable
J)John Partner's, Capital
K)Joy Partner's, Capital
L)John Partner's, withdrawals
M)Joy Partner's, withdrawals
N)Income summary
O)Service revenue
P)Gain on realization
Q)Loss on realization 
A) Cash 
B) Accounts receivable 
C) Allowance for doubtful accounts 
D) Merchandise inventory 
E) Store supplies
F)Store equipment
G)Accumulated depreciation
H)Notes payable
I)Accounts payable
J)John Partner's, Capital
K)Joy Partner's, Capital
L)John Partner's, withdrawals
M)Joy Partner's, withdrawals
N)Income summary
O)Service revenue
P)Gain on realization
Q)Loss on realization F,I

Question 2

Prepare the journal entry to record the partners' investment in the company.
Todd and Dillon combine their two businesses and enter into a partnership. Todd invests $10,000 cash and equipment on his books at $8,000 with accumulated depreciation of $3,000. The fair market value of the equipment is $7,000. Dillon is investing $6,000 cash and $500 accounts payable.

Accepted Answer

The answer of Prepare the journal entry to record the...

Question 3

A cash withdrawal of a partner was recorded the same as paying payroll. This error would cause:

Accepted Answer

A)  the period's net income to be understated. 
B)  the period's net income to be overstated. 
C)  the period end assets to be overstated. 
D)  the period end assets to be understated. 
A)  the period's net income to be understated. 
B)  the period's net income to be overstated. 
C)  the period end assets to be overstated. 
D)  the period end assets to be understated. A

Question 4

A partnership can be terminated by which of the following?

Accepted Answer

A)  Bankruptcy 
B)  Death of a partner 
C)  Agreement by partners 
D)  All of the above 
A)  Bankruptcy 
B)  Death of a partner 
C)  Agreement by partners 
D)  All of the above

Question 5

"Limited life" in a partnership agreement means:

Accepted Answer

A)  a partnership is limited in the amount of debt it is liable for in the course of the business. 
B)  a partnership is limited to the amount of revenue it can earn. 
C)  a partnership may be dissolved if the location of the business has changed. 
D)  a partnership may be dissolved as the result of any change in the ownership. 
A)  a partnership is limited in the amount of debt it is liable for in the course of the business. 
B)  a partnership is limited to the amount of revenue it can earn. 
C)  a partnership may be dissolved if the location of the business has changed. 
D)  a partnership may be dissolved as the result of any change in the ownership.

Question 6

All assets held by a partnership are:

Accepted Answer

A)  co-owned by all partners. 
B)  owned by the partner(s) who purchased the assets. 
C)  owned by the partners based on investment percentage. 
D)  owned by the partnership. 
A)  co-owned by all partners. 
B)  owned by the partner(s) who purchased the assets. 
C)  owned by the partners based on investment percentage. 
D)  owned by the partnership.

Question 7

Partner A invested furniture that was recorded at a value above the fair market value. This error would cause:

Accepted Answer

A)  the period's net income to be overstated. 
B)  the period's end capital to be understated. 
C)  the period's end assets to be overstated. 
D)  the period's end assets to be understated. 
A)  the period's net income to be overstated. 
B)  the period's end capital to be understated. 
C)  the period's end assets to be overstated. 
D)  the period's end assets to be understated.

Question 8

When a partnership is terminated, the assets are turned into cash and obligations are paid. This process is called:

Accepted Answer

A)  dissolution. 
B)  termination. 
C)  liquidation. 
D)  None of the above 
A)  dissolution. 
B)  termination. 
C)  liquidation. 
D)  None of the above

Question 9

Mutual agency means that the act of a single partner is binding on all the other partners.

Accepted Answer

A) True 
 B)False

Question 10

Since all partners are bound together in the agreement and each act on the behalf of the partnership, ________ has been established.

Accepted Answer

A)  limited life 
B)  limited risk 
C)  mutual agency 
D)  unlimited liability 
A)  limited life 
B)  limited risk 
C)  mutual agency 
D)  unlimited liability

Question 11

Sue and Jill, who have ending capital balances of $80,000 and $60,000 respectively, agree to admit two new partners. Carlos will buy 1/2 of Sue's interest for $20,000 and 1/4 of Jill's interest for $25,000 directly from the partners. Carmen will invest $40,000 for a $40,000 equity interest. Journalize the entry to admit Carlos and Carmen.

Accepted Answer

The answer of Sue and Jill, who have ending capital...

Question 12

Jeff and Bob agreed on October 1, 201x to enter into a partnership. Jeff contributes $125,000 and Bob contributes $75,000. Journalize their initial investments.

Accepted Answer

The answer of Jeff and Bob agreed on October 1,...

Question 13

Jane's investment in a new partnership includes $4,000 cash and equipment at a fair value of $10,000. The new partnership is assuming $2,200 of Jane's accounts payable. The partnership entry should be to:

Accepted Answer

A)  debit Jane, Capital $11,800; debit Accounts Payable $2,200; credit Cash $4,000; credit Equipment $10,000. 
B)  debit Cash $4,000; debit Equipment $10,000; credit Jane, Capital $14,000. 
C)  debit Cash $4,000; debit Equipment $10,000; credit Accounts Payable $2,200; credit Jane, Capital $11,800. 
D)  debit Jane, Investment $14,000; credit Capital $14,000. 
A)  debit Jane, Capital $11,800; debit Accounts Payable $2,200; credit Cash $4,000; credit Equipment $10,000. 
B)  debit Cash $4,000; debit Equipment $10,000; credit Jane, Capital $14,000. 
C)  debit Cash $4,000; debit Equipment $10,000; credit Accounts Payable $2,200; credit Jane, Capital $11,800. 
D)  debit Jane, Investment $14,000; credit Capital $14,000.

Question 14

When a partnership is dissolved:

Accepted Answer

A)  it is implied that the business cannot form a different ownership structure. 
B)  it is implied that the business cannot continue with a new group of partners. 
C)  it is implied that it must be dissolved with any change in partnership structure. 
D)  it is implied that the business will halt operations. 
A)  it is implied that the business cannot form a different ownership structure. 
B)  it is implied that the business cannot continue with a new group of partners. 
C)  it is implied that it must be dissolved with any change in partnership structure. 
D)  it is implied that the business will halt operations.

Question 15

A profit and loss ratio must be based on capital contributions.

Accepted Answer

A) True 
 B)False

Question 16

Partner C invested equipment in the partnership that has a market value exceeding book value; the equipment was recorded at its book value. This error would cause:

Accepted Answer

A)  future period's net income to be understated. 
B)  future period's net income to be overstated. 
C)  this period's end assets to be overstated. 
D)  None of these is correct. 
A)  future period's net income to be understated. 
B)  future period's net income to be overstated. 
C)  this period's end assets to be overstated. 
D)  None of these is correct.

Question 17

An investment by a new partner was debited to existing partners' capital balances. This error would cause:

Accepted Answer

A)  the new partner's capital account to be understated. 
B)  the period end partners' equity to be understated. 
C)  the period end assets to be overstated. 
D)  None of these is correct. 
A)  the new partner's capital account to be understated. 
B)  the period end partners' equity to be understated. 
C)  the period end assets to be overstated. 
D)  None of these is correct.

Question 18

When the assets are sold at a loss and one partner cannot make up the deficit, the other partners have no liability to make up the deficit.

Accepted Answer

A) True 
 B)False

Question 19

The last step in a partnership liquidation is to apply cash to creditor claims.

Accepted Answer

A) True 
 B)False

Question 20

Bob and Sam formed a partnership. Bob invested $19,000, cash; Sam invested $8,000 cash and equipment with a fair value of $6,000. The proper entry to record this is to:

Accepted Answer

A)  debit Cash $27,000; debit Equipment $6,000; credit Capital $33,000. 
B)  debit Cash $27,000; debit Equipment $6,000; credit Accounts Payable $33,000. 
C)  debit Cash $27,000; debit Equipment $6,000; credit Bob's Capital $19,000; and credit Sam's Capital $14,000. 
D)  debit Cash $27,000; credit Bob's Capital $19,000; and credit Sam's Capital $8,000. 
A)  debit Cash $27,000; debit Equipment $6,000; credit Capital $33,000. 
B)  debit Cash $27,000; debit Equipment $6,000; credit Accounts Payable $33,000. 
C)  debit Cash $27,000; debit Equipment $6,000; credit Bob's Capital $19,000; and credit Sam's Capital $14,000. 
D)  debit Cash $27,000; credit Bob's Capital $19,000; and credit Sam's Capital $8,000.

Exam 17: Partnership

Indicate the account(s) to be debited and credited to record the following transactions. -The business bought store equipment on account. Debit ________ Credit ________

A cash withdrawal of a partner was recorded the same as paying payroll. This error would cause:

A partnership can be terminated by which of the following?

"Limited life" in a partnership agreement means:

All assets held by a partnership are:

Partner A invested furniture that was recorded at a value above the fair market value. This error would cause:

When a partnership is terminated, the assets are turned into cash and obligations are paid. This process is called:

Mutual agency means that the act of a single partner is binding on all the other partners.

Since all partners are bound together in the agreement and each act on the behalf of the partnership, ________ has been established.

Jeff and Bob agreed on October 1, 201x to enter into a partnership. Jeff contributes $125,000 and Bob contributes $75,000. Journalize their initial investments.

Jane's investment in a new partnership includes $4,000 cash and equipment at a fair value of $10,000. The new partnership is assuming $2,200 of Jane's accounts payable. The partnership entry should be to:

When a partnership is dissolved:

A profit and loss ratio must be based on capital contributions.

Partner C invested equipment in the partnership that has a market value exceeding book value; the equipment was recorded at its book value. This error would cause:

An investment by a new partner was debited to existing partners' capital balances. This error would cause:

When the assets are sold at a loss and one partner cannot make up the deficit, the other partners have no liability to make up the deficit.

The last step in a partnership liquidation is to apply cash to creditor claims.

Bob and Sam formed a partnership. Bob invested $19,000, cash; Sam invested $8,000 cash and equipment with a fair value of $6,000. The proper entry to record this is to:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Indicate the account(s) to be debited and credited to record the following transactions. -The business bought store equipment on account. Debit Credit