Question 1

In partnerships, when goodwill is recorded it cannot be amortized.

Accepted Answer

A) True 
 B)False  False

Question 2

A gain or loss for income tax-reporting purposes on a partner's disposal of a partnership interest is computed by comparing the partner's __________________ to his or her _________________________________.

Accepted Answer

proceeds, tax basis

Question 3

When a partnership change in ownership occurs and the partnership has goodwill, a method intended to prevent an inequity from occurring among the partners that results in (a) entries being recorded in the general ledger relating to the goodwill and (b) a deviation from GAAP is the __________________________________ method.

Accepted Answer

recording the goodwill

Question 4

When a partnership's existence is terminated, the Revised Uniform Partnership Act refers to that as a _____________________________ of the partnership.

Accepted Answer

The answer of When a partnership's existence is terminated, the...

Question 5

When an existing partnership has goodwill and a new partner is being admitted, a method of dealing with the goodwill that does not deviate from GAAP but may favor the old partners if the goodwill does not materialize is the _________________ _________________________ method.

Accepted Answer

The answer of When an existing partnership has goodwill and...

Question 6

_____ When a person is being admitted into a partnership and the special profit and loss sharing provision method has been selected,

Accepted Answer

A)  Tangible and/or intangible assets are revalued to their current values. 
B)  No entries are made in the partnership's books. 
C)  The new partner receives a full credit to his or her capital account equal to the amount of his or her capital contribution. 
D)  The new partner may receive a credit to his or her capital account that is more or less than the amount of his or her capital contribution. 
E)  An entry is made solely within the capital accounts. 
A)  Tangible and/or intangible assets are revalued to their current values. 
B)  No entries are made in the partnership's books. 
C)  The new partner receives a full credit to his or her capital account equal to the amount of his or her capital contribution. 
D)  The new partner may receive a credit to his or her capital account that is more or less than the amount of his or her capital contribution. 
E)  An entry is made solely within the capital accounts.

Question 7

_____ When a person is being admitted into a partnership and recording the goodwill method has been selected,

Accepted Answer

A)  An entry is made solely within the capital accounts. 
B)  No entries are made in the partnership's books. 
C)  A credit is made only to the new partner's capital account. 
D)  A credit is made only to the old partner's capital account. 
E)  None of the above. 
A)  An entry is made solely within the capital accounts. 
B)  No entries are made in the partnership's books. 
C)  A credit is made only to the new partner's capital account. 
D)  A credit is made only to the old partner's capital account. 
E)  None of the above.

Question 8

When an existing partnership that has goodwill admits a new partner, the end result on the new partner's capital account will be the same under both the bonus method and the recording the goodwill method, regardless of whether the agreed-upon value of the goodwill is eventually realized.

Accepted Answer

A) True 
 B)False

Question 9

_____ Data for the partnership of A and B follow:
  Cook is to be admitted into the partnership and is to have a one-fifth interest in capital and profits with a cash contribution of $40,000. The balances in the capital accounts of A, B, and C under the bonus method are:

Accepted Answer

A)  $80,000, $60,000, and $40,000, respectively. 
B)  $92,000, $68,000, and $40,000, respectively. 
C)  $95,000, $65,000, and $40,000, respectively. 
D)  $82,400, $61,600, and $36,000, respectively. 
E)  None of the above. 
A)  $80,000, $60,000, and $40,000, respectively. 
B)  $92,000, $68,000, and $40,000, respectively. 
C)  $95,000, $65,000, and $40,000, respectively. 
D)  $82,400, $61,600, and $36,000, respectively. 
E)  None of the above.

Question 10

_____ Data for the partnership of X and Y follow:
  Z is to be admitted into the partnership and is to have a one-third interest in capital and profits with a cash contribution of $30,000. What are the balances in the capital accounts of X, Y, and Z under the bonus method?

Accepted Answer

A)  $44,000, $36,000, and $40,000, respectively. 
B)  $56,000, $44,000, and $20,000, respectively. 
C)  $50,000, $40,000, and $30,000, respectively. 
D)  $50,000, $40,000, and $40,000, respectively. 
E)  $50,000, $40,000, and $45,000, respectively. 
A)  $44,000, $36,000, and $40,000, respectively. 
B)  $56,000, $44,000, and $20,000, respectively. 
C)  $50,000, $40,000, and $30,000, respectively. 
D)  $50,000, $40,000, and $40,000, respectively. 
E)  $50,000, $40,000, and $45,000, respectively.

Question 11

_____ Data for the partnership of X and Y follow:
  Z is to be admitted into the partnership and is to have a one-third interest in capital and profits with a cash contribution of $30,000. The balances in the capital accounts of X, Y, and Z under the recording the goodwill method are:

Accepted Answer

A)  $44,000, $36,000, and $40,000, respectively. 
B)  $56,000, $44,000, and $20,000, respectively. 
C)  $50,000, $40,000, and $30,000, respectively. 
D)  $50,000, $40,000, and $40,000, respectively. 
E)  $50,000, $40,000, and $45,000, respectively. 
A)  $44,000, $36,000, and $40,000, respectively. 
B)  $56,000, $44,000, and $20,000, respectively. 
C)  $50,000, $40,000, and $30,000, respectively. 
D)  $50,000, $40,000, and $40,000, respectively. 
E)  $50,000, $40,000, and $45,000, respectively.

Question 12

Legally, a change in the ownership of a partnership is not a(n) ______________________________________________ of the old partnership.

Accepted Answer

The answer of Legally, a change in the ownership of...

Question 13

_____ The purchase of an interest from one or more of the existing partners of a partnership results in

Accepted Answer

A)  No entries being made in the partnership's books. 
B)  An entry solely within the capital accounts. 
C)  An entry to record the receipt of the consideration paid. 
D)  An entry to revalue tangible and intangible assets or to use the bonus method to give effect to such undervaluations. 
E)  An entry to reflect payments to the applicable existing partner(s) and receipt of a capital contribution from the new partner. 
A)  No entries being made in the partnership's books. 
B)  An entry solely within the capital accounts. 
C)  An entry to record the receipt of the consideration paid. 
D)  An entry to revalue tangible and intangible assets or to use the bonus method to give effect to such undervaluations. 
E)  An entry to reflect payments to the applicable existing partner(s) and receipt of a capital contribution from the new partner.

Question 14

_____ When a partner withdraws from a partnership, the determination of the withdrawing partner's gain or loss for income tax-reporting purposes is made by comparing:

Accepted Answer

A)  (1) The partner's proceeds with (2) the balance in his or her capital account. 
B)  (1) The amount of cash received with (2) his or her tax basis. 
C)  (1) The partner's capital balance with (2) his or her share of existing partnership liabilities for which he or she is relieved of responsibility. 
D)  (1) The partner's proceeds plus his or or her share of existing partnership liabilities for which he or she is relieved of responsibility with (2) his or her tax basis. 
E)  (1) The partner's tax basis plus his or her share of existing partnership liabilities for which he or she is relieved of responsibility with (2) his or her proceeds. 
A)  (1) The partner's proceeds with (2) the balance in his or her capital account. 
B)  (1) The amount of cash received with (2) his or her tax basis. 
C)  (1) The partner's capital balance with (2) his or her share of existing partnership liabilities for which he or she is relieved of responsibility. 
D)  (1) The partner's proceeds plus his or or her share of existing partnership liabilities for which he or she is relieved of responsibility with (2) his or her tax basis. 
E)  (1) The partner's tax basis plus his or her share of existing partnership liabilities for which he or she is relieved of responsibility with (2) his or her proceeds.

Question 15

_____ When Dubke retired from the partnership of Dubke, Logan, and Flaherty, the final settlement of Dubke's partnership interest exceeded Dubke's capital account balance. Under the bonus method, the excess

Accepted Answer

A)  Was recorded as goodwill. 
B)  Was recorded as an expense. 
C)  Had no effect on the capital balances of Logan and Flaherty. 
D)  Reduced the capital balances of Logan and Flaherty. 
E)  None of the above. 
A)  Was recorded as goodwill. 
B)  Was recorded as an expense. 
C)  Had no effect on the capital balances of Logan and Flaherty. 
D)  Reduced the capital balances of Logan and Flaherty. 
E)  None of the above.

Question 16

When a partner retires from a partnership, the balance in that partner's capital account that is distributed to that partner is treated as ________________________ for income tax-reporting purposes.

Accepted Answer

The answer of When a partner retires from a partnership,...

Question 17

When a partnership change in ownership occurs and the partnership has undervalued tangible assets, a method intended to prevent an inequity from occurring among the partners that results in (a) no entries being recorded in the general ledger to revalue the assets and (b) no departure from GAAP is the ______________ ______________________________ method.

Accepted Answer

The answer of When a partnership change in ownership occurs...

Question 18

When a partner retires from a partnership, the amount of existing partnership liabilities for which the retiring partner is no longer responsible is treated for income tax-reporting purposes as _______________________________________.

Accepted Answer

The answer of When a partner retires from a partnership,...

Question 19

When two partnerships combine in a manner that is substantively a pooling of interests, the assets of the combining partnerships cannot be revalued to their current values.

Accepted Answer

A) True 
 B)False

Question 20

When a partnership change in ownership occurs and the partnership has goodwill, a method intended to prevent an inequity from occurring among the partners that results in (a) no entries being recorded in the general ledger relating to the goodwill and (b) no deviation from GAAP is the _____________________________ method.

Accepted Answer

The answer of When a partnership change in ownership occurs...

Exam 21: Partnerships: Changes in Ownership

In partnerships, when goodwill is recorded it cannot be amortized.

A gain or loss for income tax-reporting purposes on a partner's disposal of a partnership interest is computed by comparing the partner's __________________ to his or her _________________________________.

When a partnership's existence is terminated, the Revised Uniform Partnership Act refers to that as a _____________________________ of the partnership.

When an existing partnership has goodwill and a new partner is being admitted, a method of dealing with the goodwill that does not deviate from GAAP but may favor the old partners if the goodwill does not materialize is the _________________ _________________________ method.

_____ When a person is being admitted into a partnership and the special profit and loss sharing provision method has been selected,

_____ When a person is being admitted into a partnership and recording the goodwill method has been selected,

When an existing partnership that has goodwill admits a new partner, the end result on the new partner's capital account will be the same under both the bonus method and the recording the goodwill method, regardless of whether the agreed-upon value of the goodwill is eventually realized.

_____ Data for the partnership of A and B follow: Cook is to be admitted into the partnership and is to have a one-fifth interest in capital and profits with a cash contribution of $40,000. The balances in the capital accounts of A, B, and C under the bonus method are:

_____ Data for the partnership of X and Y follow: Z is to be admitted into the partnership and is to have a one-third interest in capital and profits with a cash contribution of $30,000. What are the balances in the capital accounts of X, Y, and Z under the bonus method?

_____ Data for the partnership of X and Y follow: Z is to be admitted into the partnership and is to have a one-third interest in capital and profits with a cash contribution of $30,000. The balances in the capital accounts of X, Y, and Z under the recording the goodwill method are:

Legally, a change in the ownership of a partnership is not a(n) ______________________________________________ of the old partnership.

_____ The purchase of an interest from one or more of the existing partners of a partnership results in

_____ When a partner withdraws from a partnership, the determination of the withdrawing partner's gain or loss for income tax-reporting purposes is made by comparing:

_____ When Dubke retired from the partnership of Dubke, Logan, and Flaherty, the final settlement of Dubke's partnership interest exceeded Dubke's capital account balance. Under the bonus method, the excess

When a partner retires from a partnership, the balance in that partner's capital account that is distributed to that partner is treated as ________________________ for income tax-reporting purposes.

When a partner retires from a partnership, the amount of existing partnership liabilities for which the retiring partner is no longer responsible is treated for income tax-reporting purposes as _______________________________________.

When two partnerships combine in a manner that is substantively a pooling of interests, the assets of the combining partnerships cannot be revalued to their current values.

Wholly Owned Subsidiaries: at Date of Creation

Wholly Owned Subsidiaries: Postcreation Periods

Partially Owned Created Subsidiaries & Variable Interest Entities

Introduction to Business Combinations

The Purchase Method: at Date of Acquisition-100 Ownership

The Purchase Method: Postacquisition Periods and Partial Ownerships

New Basis of Accounting

Introduction to Intercompany Transactions

Intercompany Inventory Transfers

Intercompany Fixed Asset Transfers & Bond Holdings

Changes in a Parents Ownership Interest, Statement of Cash Flows, & Earnings Per Share

Reporting Segment and Related Information

International Accounting Standards & Translating Foreign Currency Transactions

Using Derivatives to Manage Foreign Currency Exposures

Translating Foreign Currency Statements: The Current Rate Method

Translating Foreign Currency Statements: The Temporal Method and the Functional Currency Concept

Interim Period Reporting

Securities and Exchange Commission Reporting

Bankruptcy Reorganizations and Liquidations

Partnerships: Formation and Operation

Partnerships: Liquidations

Estates and Trusts

Governmental Accounting: Basic Principles and the General Fund

Governmental Accounting: The Special-Purpose Funds and Special General Ledger

Not-For-Profit Organizations: Introduction and Private Npos

Filters

A gain or loss for income tax-reporting purposes on a partner's disposal of a partnership interest is computed by comparing the partner's to his or her _______________.

When an existing partnership has goodwill and a new partner is being admitted, a method of dealing with the goodwill that does not deviate from GAAP but may favor the old partners if the goodwill does not materialize is the _ _________ method.