Question 1

A _____________________ is an unincorporated association of two or more people to pursue a business for profit as co-owners.

Accepted Answer

The answer of A _____________________ is an unincorporated association of...

Question 2

Conley and Liu allow Lepley to purchase a 25% interest in their partnership for $35,000 cash.Lepley has exceptional talents that will enhance the partnership.Conley's and Liu's capital account balances are $55,000 each.The partners have agreed to share income or loss equally.Prepare the general journal entry to record the admission of Lepley to the partnership.

Accepted Answer

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Question 3

Partners' withdrawals of assets are:

Accepted Answer

A) Credited to their withdrawals accounts. 
B) Debited to their withdrawals accounts. 
C) Credited to their retained earnings. 
D) Debited to their retained earnings. 
E) Debited to their asset accounts. 
A) Credited to their withdrawals accounts. 
B) Debited to their withdrawals accounts. 
C) Credited to their retained earnings. 
D) Debited to their retained earnings. 
E) Debited to their asset accounts.

Question 4

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

Accepted Answer

The partner return on equity ratio is ca

Question 5

If a partner is unable to cover a deficiency and the other partners absorb the deficiency,then the partner with the deficiency is thus relieved of all liability.

Accepted Answer

A) True 
 B)False

Question 6

During the closing process,each partner's withdrawals account is closed to __________________.

Accepted Answer

that partn

Question 7

When a partner leaves a partnership,the present partnership ends,but the business can still continue to operate.

Accepted Answer

A) True 
 B)False

Question 8

___________________________ implies that each partner in a partnership can be called on to pay a partnership's debts.

Accepted Answer

The answer of ___________________________ implies that each partner in a...

Question 9

Which of the following statements is true?

Accepted Answer

A) Partners are employees of the partnership. 
B) Salaries to partners are expenses on the partnership income statement. 
C) Salary allowances usually reflect the relative value of services provided by partners. 
D) Salary allowances are expenses. 
E) Interest allowances are expenses. 
A) Partners are employees of the partnership. 
B) Salaries to partners are expenses on the partnership income statement. 
C) Salary allowances usually reflect the relative value of services provided by partners. 
D) Salary allowances are expenses. 
E) Interest allowances are expenses.

Question 10

Collins and Farina are forming a partnership.Collins is investing a building that has a market value of $80,000 and a book value of $65,000.However,the building carries a $56,000 mortgage that will be assumed by the partnership.Farina is investing $20,000 cash.Total capital in the partnership will be:

Accepted Answer

A) $80,000 
B) $24,000 
C) $56,000 
D) $44,000 
E) $60,000 
A) $80,000 
B) $24,000 
C) $56,000 
D) $44,000 
E) $60,000

Question 11

Groh and Jackson are partners.Groh's capital balance in the partnership is $64,000 and Jackson's capital balance is $61,000.Groh and Jackson have agreed to share equally in income or loss.Groh and Jackson agree to accept Block with a 20% interest.Block will invest $35,000 in the partnership.The bonus that is granted to Groh and Jackson equals:

Accepted Answer

A) $1,500 each. 
B) $1,875 each. 
C) $3,750 each. 
D) $1,920 to Groh; $1,830 to Jackson. 
E) $0,because Groh and Jackson actually grant a bonus to Block. 
A) $1,500 each. 
B) $1,875 each. 
C) $3,750 each. 
D) $1,920 to Groh; $1,830 to Jackson. 
E) $0,because Groh and Jackson actually grant a bonus to Block.

Question 12

When a partnership is liquidated,its business is ended.

Accepted Answer

A) True 
 B)False

Question 13

Chad Forrester is a limited partner in a sports management firm.During the previous year his return on partnership equity was 16%.The beginning balance in his capital account was $450,000 and his partnership net income for this year was $75,000.What was the balance in Chad's capital account at the end of last year?

Accepted Answer

A) $525,000 
B) $937,500 
C) $487,500 
D) $468,750 
E) $37,500 
A) $525,000 
B) $937,500 
C) $487,500 
D) $468,750 
E) $37,500

Question 14

Blaser,Lukins,and Franko formed a partnership with Blaser contributing $160,000,Lukins contributing $520,000,and Franko contributing $240,000.Their partnership agreement called for the income (loss) division to be based on the ratio of capital investments.If the partnership had income of $275,000 for its first year of operation,what amount of income (rounded to the nearest dollar) would be credited to Franko's capital account?

Accepted Answer

A) $50,000 
B) $240,000 
C) $91,667 
D) $71,739 
E) $275,000 
A) $50,000 
B) $240,000 
C) $91,667 
D) $71,739 
E) $275,000

Question 15

When a partnership is liquidated,which of the following is not true?

Accepted Answer

A) Noncash assets are converted to cash. 
B) Any gain or loss on liquidation is allocated to the partners' capital accounts using the income and loss sharing ratio. 
C) Liabilities are paid or settled. 
D) Any remaining cash is distributed to the partners based on their capital balances. 
E) Any remaining cash is distributed to partners in accordance with the income- and loss-sharing ratio. 
A) Noncash assets are converted to cash. 
B) Any gain or loss on liquidation is allocated to the partners' capital accounts using the income and loss sharing ratio. 
C) Liabilities are paid or settled. 
D) Any remaining cash is distributed to the partners based on their capital balances. 
E) Any remaining cash is distributed to partners in accordance with the income- and loss-sharing ratio.

Question 16

Armstrong plans to leave the FAP Partnership.The recorded value of her capital account is $48,000.The remaining partners,Floyd and Peters,agree to pay Armstrong $40,000 cash.The partners have agreed to share income and loss equally.Prepare the general journal entry to record the withdrawal from the partnership.

Accepted Answer

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Question 17

Miller and Reising formed a partnership.Miller contributed land valued at $90,000 and a building valued at $115,000.Reising contributed $90,000 cash.In addition,the partnership assumed responsibility for Miller's $85,000 mortgage payable associated with the land and building.What are the balances of the partners' capital accounts after these transactions have been recorded?

Accepted Answer

A) Miller: $120,000; Reising: $90,000. 
B) Miller: $205,000; Reising: $90,000. 
C) Miller: $105,000; Reising: $105,000. 
D) Miller: $90,000; Reising: $120,000. 
E) Miller: $90,000; Reising: $205,000. 
A) Miller: $120,000; Reising: $90,000. 
B) Miller: $205,000; Reising: $90,000. 
C) Miller: $105,000; Reising: $105,000. 
D) Miller: $90,000; Reising: $120,000. 
E) Miller: $90,000; Reising: $205,000.

Question 18

A partnership is an unincorporated association of two or more people to pursue a business for profit as co-owners.

Accepted Answer

A) True 
 B)False

Question 19

When a partner is added to a partnership:

Accepted Answer

A) The previous partnership ends. 
B) The underlying business operations ends. 
C) The underlying business operations must close and then reopen. 
D) The partnership must continue. 
E) The partnership equity always increases. 
A) The previous partnership ends. 
B) The underlying business operations ends. 
C) The underlying business operations must close and then reopen. 
D) The partnership must continue. 
E) The partnership equity always increases.

Question 20

Identify and discuss the key characteristics of partnerships.Also,identify nonpartnership organizations that possess the positive aspects of both partnerships and corporations.

Accepted Answer

Partnerships are unincorporated associat

A _____________________ is an unincorporated association of two or more people to pursue a business for profit as co-owners.

Partners' withdrawals of assets are:

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

If a partner is unable to cover a deficiency and the other partners absorb the deficiency,then the partner with the deficiency is thus relieved of all liability.

During the closing process,each partner's withdrawals account is closed to __________________.

When a partner leaves a partnership,the present partnership ends,but the business can still continue to operate.

___________________________ implies that each partner in a partnership can be called on to pay a partnership's debts.

Which of the following statements is true?

When a partnership is liquidated,its business is ended.

When a partnership is liquidated,which of the following is not true?

A partnership is an unincorporated association of two or more people to pursue a business for profit as co-owners.

When a partner is added to a partnership:

Identify and discuss the key characteristics of partnerships.Also,identify nonpartnership organizations that possess the positive aspects of both partnerships and corporations.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting With Special Journals

Filters

Exam 16: Accounting for Partnerships

A _____________________ is an unincorporated association of two or more people to pursue a business for profit as co-owners.

Partners' withdrawals of assets are:

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

If a partner is unable to cover a deficiency and the other partners absorb the deficiency,then the partner with the deficiency is thus relieved of all liability.

During the closing process,each partner's withdrawals account is closed to __________________.

When a partner leaves a partnership,the present partnership ends,but the business can still continue to operate.

___________________________ implies that each partner in a partnership can be called on to pay a partnership's debts.

Which of the following statements is true?

When a partnership is liquidated,its business is ended.

When a partnership is liquidated,which of the following is not true?

A partnership is an unincorporated association of two or more people to pursue a business for profit as co-owners.

When a partner is added to a partnership:

Identify and discuss the key characteristics of partnerships.Also,identify nonpartnership organizations that possess the positive aspects of both partnerships and corporations.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting With Special Journals

Filters