Deck 23: Accounting for Partnerships

Question 1

One advantage of a partnership is

A) ease of formation.
B) limited liability.
C) unlimited life of the partnership.
D) limited vision and skills.

Answer 1

ease of formation.

Question 2

When a partner invests in office equipment, the entry includes a

A) debit to the partner's capital account.
B) debit to Office Equipment.
C) credit to Cash.
D) credit to Office Equipment.

Answer 2

debit to Office Equipment.

Question 3

When a partner withdraws supplies from the partnership, the entry includes a

A) a debit to the partner's capital account.
B) a debit to the partner's drawing account.
C) a debit to Supplies.
D) a credit to the partner's drawing account.

Answer 3

a debit to the partner's drawing account.

Question 4

Partnership earnings are divided

A) equally.
B) according to how long the partner has been in the business.
C) according to the age of each partner.
D) according to the partnership agreement.

Question 5

The last step in liquidating a partnership is

A) to quit selling products and services.
B) selling all noncash assets.
C) distributing remaining cash to the partners.
D) liquidating liabilities.

Question 6

A partner's drawing account

A) has a normal debit balance.
B) has a normal credit balance.
C) can have a normal balance of either a debit or a credit.
D) increases on the credit side.

Question 7

A disadvantage of a partnership over other forms of business ownership is

A) being liable for your partner's actions.
B) simple tax structure.
C) having more capital available.
D) sharing work.

Question 8

When noncash assets are liquidated and the amount received is less than the book value of the asset liquidated, there is a

A) net income.
B) net loss.
C) gain on the realization.
D) loss on the realization.

Question 9

A partnership distribution of net income or net loss is usually shown on

A) the trial balance.
B) the balance sheet.
C) the statement of cash flows.
D) none of these.

Question 10

Select the one term that best fits each definition

-A business in which two or more persons combine their assets and skills.

A) distribution of net income statement
B) liquidation of a partnership
C) owners' equity statement
D) partner
E) partnership
F) partnership agreement
G) realization

Question 11

Select the one term that best fits each definition

-A financial statement that summarizes the changes in owners' equity during a fiscal period.

A) distribution of net income statement
B) liquidation of a partnership
C) owners' equity statement
D) partner
E) partnership
F) partnership agreement
G) realization

Question 12

Select the one term that best fits each definition

-Cash received from the sale of assets during liquidation of a partnership.

A) distribution of net income statement
B) liquidation of a partnership
C) owners' equity statement
D) partner
E) partnership
F) partnership agreement
G) realization

Question 13

Select the one term that best fits each definition

-A written agreement setting forth the conditions under which a partnership is to operate.

A) distribution of net income statement
B) liquidation of a partnership
C) owners' equity statement
D) partner
E) partnership
F) partnership agreement
G) realization

Question 14

Select the one term that best fits each definition

-The process of paying a partnership's liabilities and distributing remaining assets to the partners.

A) distribution of net income statement
B) liquidation of a partnership
C) owners' equity statement
D) partner
E) partnership
F) partnership agreement
G) realization

Question 15

Select the one term that best fits each definition

-A partnership financial statement showing net income or loss distribution to partners.

A) distribution of net income statement
B) liquidation of a partnership
C) owners' equity statement
D) partner
E) partnership
F) partnership agreement
G) realization

Question 16

Select the one term that best fits each definition

-Each member of a partnership.

A) distribution of net income statement
B) liquidation of a partnership
C) owners' equity statement
D) partner
E) partnership
F) partnership agreement
G) realization

Question 17

Credit card sales on the Internet are handled differently than other credit card sales.

Question 18

International transactions are all covered by the same universal commercial laws and the same accounting standards.

Question 19

A company's website must be easy to navigate and safe to use.

Question 20

It is easy to determine an international customer's financial condition or to take legal action if that customer does not pay.

Question 21

Domestic sales are much simpler than international sales.

Question 22

Selling merchandise to individuals or other businesses within one's own country is generally referred to as domestic sales.

Question 23

The growth of information technology and trading relationships have made doing business internationally more complex.

Question 24

Internet sales must be done in cash rather than by using a credit card.

Question 25

International sales often specify a letter of credit as the method of payment.

Question 26

International sales are not a very important source of revenue for businesses throughout the world.

Question 27

The entry to journalize the receipt of a time draft for an international sale would be recorded in a

A) cash payments journal.
B) cash receipts journal.
C) general journal.
D) sales journal.

Question 28

The entry to journalize an Internet cash sale is a debit to Cash and a credit to

A) International Sales.
B) Time Drafts Receivable.
C) Sales.
D) Internet Sales.

Question 29

The entry to journalize the receipt of a time draft for an international sale would be

A) debit Time Drafts Receivable; credit Cash.
B) debit Time Drafts Receivable; credit Sales.
C) debit Sales; credit Time Drafts Receivable.
D) debit Cash; credit Time Drafts Receivable.

Question 30

The entry to journalize the receipt of cash for the value of a time draft would be recorded in a

A) cash payments journal.
B) cash receipts journal.
C) general journal.
D) sales journal.

Question 31

The entry to journalize the receipt of cash for the value of a time draft would be

A) debit Time Drafts Receivable; credit Cash.
B) debit Time Drafts Receivable; credit Sales.
C) debit Sales; credit Time Drafts Receivable.
D) debit Cash; credit Time Drafts Receivable.

Question 32

The entry to journalize an international cash sale is a debit to Cash and a credit to

A) International Sales.
B) Time Drafts Receivable.
C) Sales.
D) Internet Sales.

Question 33

The entry to journalize an international cash sale would be recorded in a

A) cash payments journal.
B) cash receipts journal.
C) general journal.
D) sales journal.

Question 34

Select the one term that best fits each definition.

-Goods or services shipped out of a seller's home country to a foreign country.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 35

Select the one term that best fits each definition.

-A letter issued by a bank guaranteeing that a named individual or business will be paid a specified amount provided stated conditions are met.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 36

Select the one term that best fits each definition.

-A draft payable on sight when the holder presents it for payment.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 37

Select the one term that best fits each definition.

-A form signed by a buyer at the time of a sale of merchandise in which the buyer promises to pay the seller a specified sum of money, usually at a stated time in the future.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 38

Select the one term that best fits each definition.

-Goods or services shipped into the buyer's home country from another country.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 39

Select the one term that best fits each definition.

-A document that details all the terms agreed to by the seller and buyer for a sales transaction.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 40

Select the one term that best fits each definition.

-A statement prepared by the seller of merchandise addressed to the buyer, showing a detailed listing and description of merchandise sold, including prices and terms.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 41

Select the one term that best fits each definition.

-A written, signed, and dated order from one party ordering another party, usually a bank, to pay money to a third party.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 42

Select the one term that best fits each definition.

-A draft that is payable at a fixed or determinable future time after it is accepted.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance

Question 43

Select the one term that best fits each definition.

-A receipt signed by the authorized agent of a transportation company for merchandise received that also serves as a contract for the delivery of the merchandise.

A) bill of lading
B) commercial invoice
C) contract of sale
D) draft
E) exports
F) imports
G) letter of credit
H) sight draft
I) time draft
J) trade acceptance