Question 1

Bloom and Plant organize a partnership on January 1.Bloom's initial investment consists of $800 cash,$1,700 equipment and a $500 note payable reflecting a bank loan for the new business.Plant's initial investment is cash of $2,000.These amounts are the values agreed on by both partners.The journal entry to record Plant's investment is:

Accepted Answer

A)  Debit Cash $1,500;debit Note Payable $500;credit Plant,Capital $2,000.
B)  Debit Cash $2,000;credit Note Payable $500,credit Plant,Capital $1,500.
C)  Debit Bloom,Capital $2,000;credit Cash $2,000.
D)  Debit Cash $2,500;credit Note Payable $500;credit Plant,Capital $2,500.
E)  Debit Cash $2,000;credit Plant,Capital $2,000.F) B) and D)
G) All of the above

Question 2

Peters and Chong are partners and share equally in income or loss.Peters' current capital balance is $140,000 and Chong's is $130,000.Peters and Chong agree to accept Aaron with a 30% interest in the partnership.Aaron invests $98,000 in the partnership.The amount credited to Aaron's capital account is:

Accepted Answer

A)  $81,000.
B)  $102,600.
C)  $110,400.
D)  $98,000.
E)  $114,533.F) All of the above
G) B) and E)

Question 3

The life of a partnership is ____________________ in duration.

Accepted Answer

The answer of The life of a partnership is ____________________...

Question 4

Partners can invest assets but not liabilities into a partnership.

Accepted Answer

A) True 
 B)False

Question 5

If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

Accepted Answer

A)  C Corporation
B)  S Corporation
C)  Limited liability partnership
D)  Partnership
E)  Limited liability companyF) None of the above
G) B) and C)

Question 6

The following information is available on TGR Enterprises,a partnership,for the most recent fiscal year:  There are three partners in TGR Enterprises: Tracey,Gregory and Rodgers.At the end of the year,the partners' capital accounts were in the ratio of 2:1:2,respectively.Compute the ending capital balances of the three partners.

Accepted Answer

A)  Tracey = $108,000;Gregory = $54,000;Rodgers = $108,000.
B)  Tracey = $90,000;Gregory = $90,000;Rodgers = $90,000.
C)  Tracey = $204,000;Gregory = $102,000;Rodgers = $204,000.
D)  Tracey = $84,000;Gregory = $102,000;Rodgers = $84,000.
E)  Tracey = $60,000;Gregory = $30,000;Rodgers = $60,000.F) All of the above
G) A) and B)

Question 7

Wheadon,Davis,and Singer formed a partnership with Wheadon contributing $60,000,Davis contributing $50,000 and Singer contributing $40,000.Their partnership agreement called for the income (loss) division to be based on the ratio of capital investments.If the partnership had income of $75,000 for its first year of operation,what amount of income (rounded to the nearest thousand) would be credited to Wheadon's capital account?

Accepted Answer

A)  $20,000.
B)  $25,000.
C)  $30,000.
D)  $40,000.
E)  $75,000.F) B) and E)
G) C) and E)

Question 8

Jakobs,Penn,and Lundt are partners with beginning-of-year capital balances of $400,000,$320,000,and $160,000,respectively.The partners agreed to share income and loss as follows: Salary of $30,000 to Jakobs,$50,000 to Penn,and $36,000 to Lundt.An interest allowance of 8% on beginning-of-year capital balances.Any remaining balance is to be divided equally.If partnership net income for the year is $190,000,determine each partner's share and make the appropriate journal entry to close the Income Summary to the capital accounts.

Accepted Answer

The answer of Jakobs,Penn,and Lundt are partners with beginning-of-year capital...

Question 9

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

Accepted Answer

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

Question 10

Peters,Chong,and Aaron are dissolving their partnership.Their partnership agreement allocates each partner an equal share of all income and losses.The current period's ending capital account balances are Peters,$54,000;Chong,$42,000;and Aaron,$(2,000) .After all assets are sold and liabilities are paid,there is $94,000 in cash to be distributed.Aaron is unable to pay the deficiency.The journal entry to record the distribution should be:

Accepted Answer

A)  Debit Peters,Capital $54,000;debit Chong,Capital $40,000;credit Cash $94,000.
B)  Debit Peters,Capital $54,000;debit Chong,Capital $42,000;credit Cash $96,000.
C)  Debit Peters,Capital $53,000;debit Chong,Capital $41,000;credit Cash $94,000.
D)  Debit Cash $94,000,debit Aaron,Capital $2,000,credit Peters,Capital $54,000,credit Chong,Capital $42,000.
E)  Debit Cash $94,000;credit Peters,Capital $47,000;credit Chong,Capital $47,000.F) C) and D)
G) B) and C)

Question 11

Mace and Bowen are partners and share equally in income or loss.Mace's current capital balance is $135,000 and Bowen's is $120,000.Mace and Bowen agree to accept Kent with a 30% interest in the partnership.Kent invests $115,000 in the partnership.The amount credited to Kent's capital account is:

Accepted Answer

A)  $111,000.
B)  $115,000.
C)  $92,500.
D)  $120,000.
E)  $119,000.F) B) and D)
G) B) and E)

Question 12

Wright,Bell,and Edison are partners and share income in a 2:5:3 ratio.The partnership's capital balances are as follows: Wright,$33,000,Bell $27,000 and Edison $40,000.Edison decides to withdraw from the partnership,and the partners agree not to revalue the assets upon Edison's retirement.The journal entry to record Edison's June 1 withdrawal from the partnership if Edison sells his interest to Whitney for $45,000 after the other two partners approve Whitney as partner is:

Accepted Answer

A)  Debit Edison,Capital $45,000;credit Whitney,Capital $45,000.
B)  Debit Edison,Capital $40,000;credit Cash $40,000.
C)  Debit Edison,Capital $40,000;debit Wright,Capital $2,500;debit Bell,Capital $2,500;credit Whitney,Capital $45,000.
D)  Debit Edison,Capital $40,000;credit Whitney,Capital $40,000.
E)  Debit Edison,Capital $40,000;debit Cash $5,000;credit Whitney,Capital $45,000.F) A) and D)
G) B) and D)

Question 13

Partnership accounting is the same as accounting for:

Accepted Answer

A)  A sole proprietorship.
B)  A corporation.
C)  A sole proprietorship,except that separate capital and withdrawal accounts are kept for each partner.
D)  An S corporation.
E)  A corporation,except that retained earnings is used to keep track of partners' withdrawals.F) All of the above
G) B) and E)

Question 14

When a partner invests in a partnership,his/her capital account is __________ for the invested amount.

Accepted Answer

The answer of When a partner invests in a partnership,his/her...

Question 15

Fontaine and Monroe are forming a partnership.Fontaine invests a building that has a market value of $250,000;the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property.Monroe invests $100,000 in cash and equipment that has a market value of $55,000.For the partnership,the amounts recorded for total assets and for total capital account are:

Accepted Answer

A)  Total assets $405,000;total capital $330,000.
B)  Total assets $350,000;total capital $350,000.
C)  Total assets $350,000;total capital $275,000.
D)  Total assets $305,000;total capital $230,000.
E)  Total assets $405,000;total capital $305,000.F) D) and E)
G) A) and B)

Question 16

Salary allowances are reported as salaries expense on a partnership income statement.

Accepted Answer

A) True 
 B)False

Question 17

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ________________________ partnership.

Accepted Answer

The answer of A partnership designed to protect innocent partners...

Question 18

A relatively new form of business organization that protects partners with limited liability,allows limited partners to assume an active management role,and is taxed as a partnership is a ______________________________.

Accepted Answer

limited li...

Question 19

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.F) A) and D)
G) B) and D)

Question 20

A partnership has a limited life.

Accepted Answer

A) True 
 B)False

Exam 12: Accounting for Partnerships

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ________________________ partnership.

Correct Answer
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A relatively new form of business organization that protects partners with limited liability,allows limited partners to assume an active management role,and is taxed as a partnership is a ______________________________.

Correct Answer
verified
limited li...
View Answer

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

Correct Answer
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A partnership has a limited life.

Correct Answer
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Partners can invest assets but not liabilities into a partnership.

Correct Answer
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When a partner invests in a partnership,his/her capital account is __________ for the invested amount.

Correct Answer
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Mace and Bowen are partners and share equally in income or loss.Mace's current capital balance is $135,000 and Bowen's is $120,000.Mace and Bowen agree to accept Kent with a 30% interest in the partnership.Kent invests $115,000 in the partnership.The amount credited to Kent's capital account is:

Correct Answer
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If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

Correct Answer
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Correct Answer
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Which of the following statements is true?

Correct Answer
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Salary allowances are reported as salaries expense on a partnership income statement.

Correct Answer
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The life of a partnership is ____________________ in duration.

Correct Answer
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Partnership accounting is the same as accounting for:

Correct Answer
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Correct Answer
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Exam 12: Accounting for Partnerships

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ________________________ partnership.

Correct AnswerverifiedShow Answer

A relatively new form of business organization that protects partners with limited liability,allows limited partners to assume an active management role,and is taxed as a partnership is a ______________________________.

Correct Answerverifiedlimited li...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

A partnership has a limited life.

Correct AnswerverifiedShow Answer

Partners can invest assets but not liabilities into a partnership.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a partner invests in a partnership,his/her capital account is __________ for the invested amount.

Correct AnswerverifiedShow Answer

Mace and Bowen are partners and share equally in income or loss.Mace's current capital balance is $135,000 and Bowen's is $120,000.Mace and Bowen agree to accept Kent with a 30% interest in the partnership.Kent invests $115,000 in the partnership.The amount credited to Kent's capital account is:

Correct AnswerverifiedShow Answer

If a company wants to protect its three investors against personal liability risk,which of the following business forms would not be a suitable option?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Salary allowances are reported as salaries expense on a partnership income statement.

Correct AnswerverifiedShow Answer

The life of a partnership is ____________________ in duration.

Correct AnswerverifiedShow Answer

Partnership accounting is the same as accounting for:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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limited li...
View Answer

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