Question 1

Mutual agency means

Accepted Answer

A) Creditors can apply their claims to partners' personal assets. 
B) Partners are taxed on partnership withdrawals. 
C) All partners must agree before the partnership can act. 
D) The partnership has a limited life. 
E) A partner can commit or bind the partnership in any contract within the scope of the partnership business. 
A) Creditors can apply their claims to partners' personal assets. 
B) Partners are taxed on partnership withdrawals. 
C) All partners must agree before the partnership can act. 
D) The partnership has a limited life. 
E) A partner can commit or bind the partnership in any contract within the scope of the partnership business.

Question 2

In the absence of a partnership agreement,the law says that income and loss should be allocated based on:

Accepted Answer

A) A fractional basis. 
B) The ratio of capital investments. 
C) Salary allowances. 
D) Equal shares. 
E) Interest allowances. 
A) A fractional basis. 
B) The ratio of capital investments. 
C) Salary allowances. 
D) Equal shares. 
E) Interest allowances.

Question 3

Assets invested by a partner into a partnership remain the property of the individual partner.

Accepted Answer

A) True 
 B)False

Question 4

Assume that the S & B partnership agreement gave Steely 60% and Breck 40% of partnership income and losses.The partnership recorded a loss of $27,000 in the current period.Steely's share of the loss equals $16,200 and Breck's share equals $10,800.

Accepted Answer

A) True 
 B)False

Question 5

In closing the accounts at the end of a period,the partners' capital accounts are credited for their share of the partnership loss or debited for their share of the partnership net income.

Accepted Answer

A) True 
 B)False

Question 6

A partnership recorded the following journal entry:   This entry reflects:

Accepted Answer

A) Acceptance of a new partner who invests $70,000 and receives a $20,000 bonus. 
B) Withdrawal of a partner who pays a $10,000 bonus to each of the other partners. 
C) Addition of a partner who pays a bonus to each of the other partners. 
D) Additional investment into the partnership by Tanner and Jackson. 
E) Withdrawal of $10,000 each by Tanner and Jackson upon the admission of a new partner. 
A) Acceptance of a new partner who invests $70,000 and receives a $20,000 bonus. 
B) Withdrawal of a partner who pays a $10,000 bonus to each of the other partners. 
C) Addition of a partner who pays a bonus to each of the other partners. 
D) Additional investment into the partnership by Tanner and Jackson. 
E) Withdrawal of $10,000 each by Tanner and Jackson upon the admission of a new partner.

Question 7

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 8

When a partner leaves a partnership,the withdrawing partner is entitled to a bonus if the recorded equity is overstated.

Accepted Answer

A) True 
 B)False

Question 9

The partnership shows the following capital balances at the date of Lance's withdrawal: Willow,$84,000,Lance,$38,000,and Jordan,$38,000.The partners (Willow,Lance,and Jordan) share income and loss equally.Lance withdraws and is paid $38,000 of cash.How would the partnership record the withdrawal of Lance?

Accepted Answer

A) Debit Cash for $38,000 and credit Lance,Capital for $38,000 
B) Debit Lance,Capital for $38,000 and credit Cash for $38,000. 
C) Debit Willow,Capital for $19,000,debit Jordan,Capital for $19,000 and credit Cash for $38,000. 
D) Debit Willow,Capital for $38,000 and credit Cash for $38,000. 
E) Debit Jordan,Capital for $38,000 and credit Cash for $38,000. 
A) Debit Cash for $38,000 and credit Lance,Capital for $38,000 
B) Debit Lance,Capital for $38,000 and credit Cash for $38,000. 
C) Debit Willow,Capital for $19,000,debit Jordan,Capital for $19,000 and credit Cash for $38,000. 
D) Debit Willow,Capital for $38,000 and credit Cash for $38,000. 
E) Debit Jordan,Capital for $38,000 and credit Cash for $38,000.

Question 10

The BlueFin Partnership agreed to dissolve.The remaining cash balance after liquidating partnership assets and liabilities is $60,000.The final capital account balances are: Smith,$30,000; Nagy,$20,000; and Russ,$10,000.Prepare the journal entry to distribute the remaining cash to the partners.

Accepted Answer

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Question 11

Elaine Valero is a limited partner in a marketing and design firm.During the previous year her return on partnership equity was 14%.During this time,the beginning and ending balances in her capital account were $210,000 and $230,000 respectively.What was Elaine's partnership net income for this year?

Accepted Answer

A) $29,400.00 
B) $30,800.00 
C) $32,200.00 
D) $1,500,000.00 
E) $1,642,857.14 
A) $29,400.00 
B) $30,800.00 
C) $32,200.00 
D) $1,500,000.00 
E) $1,642,857.14

Question 12

The BlueFin Partnership agrees to dissolve.The cash balance after selling all assets and paying all liabilities is $56,000.The final capital account balances are: Smith,$33,000; Nagy,$27,000; and Russ, ($4,000).Russ agrees to pay $4,000 cash from personal funds to settle his deficiency.Prepare the journal entries to record the transactions required to dissolve this partnership.

Accepted Answer

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Question 13

Web Services is organized as a limited partnership,with Wren Littlefeather as one of its partners.Wren's capital account began the year with a balance of $87,000.During the year,Wren's share of the partnership income was $60,000 and she received $25,000 in distributions from the partnership.What is Wren's partner return on equity?

Accepted Answer

A) 57.42% 
B) 49.18% 
C) 68.97% 
D) 33.49% 
E) 40.23% 
A) 57.42% 
B) 49.18% 
C) 68.97% 
D) 33.49% 
E) 40.23%

Question 14

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.

Mutual agency means

In the absence of a partnership agreement,the law says that income and loss should be allocated based on:

Assets invested by a partner into a partnership remain the property of the individual partner.

Assume that the S & B partnership agreement gave Steely 60% and Breck 40% of partnership income and losses.The partnership recorded a loss of $27,000 in the current period.Steely's share of the loss equals $16,200 and Breck's share equals $10,800.

In closing the accounts at the end of a period,the partners' capital accounts are credited for their share of the partnership loss or debited for their share of the partnership net income.

A partnership recorded the following journal entry: This entry reflects:

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

When a partner leaves a partnership,the withdrawing partner is entitled to a bonus if the recorded equity is overstated.

The BlueFin Partnership agreed to dissolve.The remaining cash balance after liquidating partnership assets and liabilities is $60,000.The final capital account balances are: Smith,$30,000; Nagy,$20,000; and Russ,$10,000.Prepare the journal entry to distribute the remaining cash to the partners.

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

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Exam 16: Accounting for Partnerships

Mutual agency means

In the absence of a partnership agreement,the law says that income and loss should be allocated based on:

Assets invested by a partner into a partnership remain the property of the individual partner.

Assume that the S & B partnership agreement gave Steely 60% and Breck 40% of partnership income and losses.The partnership recorded a loss of $27,000 in the current period.Steely's share of the loss equals $16,200 and Breck's share equals $10,800.

In closing the accounts at the end of a period,the partners' capital accounts are credited for their share of the partnership loss or debited for their share of the partnership net income.

A partnership recorded the following journal entry: This entry reflects:

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

When a partner leaves a partnership,the withdrawing partner is entitled to a bonus if the recorded equity is overstated.

The BlueFin Partnership agreed to dissolve.The remaining cash balance after liquidating partnership assets and liabilities is $60,000.The final capital account balances are: Smith,$30,000; Nagy,$20,000; and Russ,$10,000.Prepare the journal entry to distribute the remaining cash to the partners.

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