Chapter 12

S. Diaz and T. Sosa are partners with equal capital balances of $60,000 each. They agree to let J. Smith invest $30,000 in their partnership for a 10% interest, including bonuses to the existing partners. Smith's beginning capital balance will equal $

Blank 1: 15000

D. Silver withdraws from a partnership with two other partners, J. Gloss and T. Wyatt. Silver agrees to take $20,000 cash in settlement of her capital balance of $25,000. $ ____________will be (debited/credited) ___________ to D. Silver, Capital.

Blank 1: 25000 Blank 2: debited or debit

The type of partnership where all partners have mutual agency and unlimited liability is called: Multiple choice question. full partnership limited partnership co-partnership general partnership

general partnership

On January 1, Baker and Rios create a partnership by investing $20,000 each and agreeing to share income and losses equally. During the year, Baker earns $5,000 salary allowance and withdraws $2,000. Net income is $20,000. Rio's ending capital balance is $

Blank 1: 27500 or 27,500

J. Dish and R. Conley are partners with capital balances of $60,000 each. They agree to let R. Ritz invest $30,000 in their partnership for a 25% interest. R. Ritz's beginning capital balance will equal $

Blank 1: 37500

The ability of each partner to bind the partnership to contracts is called ______________ agency.

Blank 1: mutual

is ___________an unincorporated association of two or more people who pursue a business for profit as co-owners.

Blank 1: partnership

L. Jones withdraws from a partnership with two other partners. Jones agrees to take $15,000 in settlement of his capital balance of $25,000. This creates a ______ bonus that is allocated to _______. Multiple choice question. $40,000; the remaining partners $40,000; the withdrawing partner $15,000; the remaining partners $10,000; the withdrawing partner $15,000; the withdrawing partner $10,000; the remaining partners

$10,000; the remaining partners

The partnership agreement of J. Patel and S. Moon reflects differences in service and capital contributions as follows: (1) annual salary allowances of $50,000 to Patel and $30,000 to Moon; and (2) equal share of any remaining balance of income or loss. In the first year, the partnership makes $100,000. The income allocated to Patel would be $

60000

In partnership accounting, ownership rights are divided among partners. Each partner will use a capital account, withdrawal account, and be allocated net income according to the

Blank 1: partnership Blank 2: agreement or contract

D. Buck withdraws from a partnership with four other partners. Buck agrees to take $25,000 in settlement of his capital balance of $15,000. This creates a ______ bonus that is paid to _______. Multiple choice question. $15,000; the withdrawing partner $15,000; the remaining partners $40,000; the withdrawing partner $40,000; the remaining partners $10,000; the withdrawing partner $10,000; the remaining partners

$10,000; the withdrawing partner Reason: When a withdrawing partner receives payment greater than his recorded equity, the withdrawing partner receives a bonus equal to the payment minus his capital balance.

S. Wang and T. Wu are partners with equal capital balances of $50,000 each. They agree to let J. Li invest $20,000 in their partnership for a 10% interest, including bonuses to the existing partners. Li's beginning capital balance will equal _________. Multiple choice question. $20,000 $12,000 $10,000

$12,000 Reason: Total capital = $50,000+50,000+20,000=$120,000. $120,000 x .10 = $12,000.

On January 1, Drake and Potter create a partnership by investing $10,000 each and agreeing to share income and losses equally. During the year, Drake withdraws $3,000 and Potter withdraws $5,000. Net income is $30,000. How much is Drake's ending capital balance? Multiple choice question. $42,000 $28,000 $22,000 $37,000

$22,000 Reason: Net income of $30,000/2=$15,000 each. $10,000+$15,000=$25,000-$3,000=$22,000.

On January 1, Drake and Potter create a partnership by investing $10,000 each and agreeing to share income and losses equally. During the year, Drake withdraws $3,000 and Potter withdraws $5,000. Net income is $30,000. How much is Drake's ending capital balance?

$22,000 Reason: Net income of $30,000/2=$15,000 each. $10,000+$15,000=$25,000-$3,000=$22,000.

The partnership agreement of T. Chung and N. Patel states that the partners will share income and loss based on beginning capital balances. At the beginning of the year, Chung's capital balance was $30,000 and Patel's capital balance was $10,000. If net income during the period was $100,000, then the entry to close net income to Patel's capital account will include a credit to N. Patel, Capital in the amount of ________. Multiple choice question. $25,000 $75,000 $30,000 $10,000 $50,000

$25,000

T. Reed and S. Riley are partners with equal capital balances of $50,000 each. They agree to let R. Smith invest $20,000 in their partnership for a 25% interest. R. Smith's beginning capital balance will equal ________. Multiple choice question. $20,000 $30,000 $25,000

$30,000

The partnership agreement of Lehman and Gonzalez states that the partners share profits and losses according to their capital balances. Prior to the liquidation, the partners' capital balances were $40,000 for Lehman and $60,000 for Gonzalez. The partners sold assets for a gain of $6,000. Assuming there are no deficits, Lehman will receive _______ cash for the liquidation? Multiple choice question. $42,400 $43,000 $46,000 $37,000 $40,000

$42,400 Reason: $40,000 + $60,000 = $100,000. $40,000/$100,000 = 40%. $6,000 x 40% =$2,400. $2,400 + $40,000 = $42,400.

The partnership agreement of J. Hansen and D. Hernandez reflects differences in service and capital contributions as follows: (1) annual salary allowances of $30,000 to Hansen and $10,000 to Hernandez; (2) annual interest allowances of 10% of a partner's beginning-year capital balance, and (3) equal share of any remaining balance of income or loss. Both partners had beginning-year capital balances of $50,000. In the first year, the partnership makes $100,000. How much income would be allocated to Hansen?

$60,000

The partnership agreement of J. Hansen and D. Hernandez reflects differences in service and capital contributions as follows: (1) annual salary allowances of $30,000 to Hansen and $10,000 to Hernandez; (2) annual interest allowances of 10% of a partner's beginning-year capital balance, and (3) equal share of any remaining balance of income or loss. Both partners had beginning-year capital balances of $50,000. In the first year, the partnership makes $100,000. How much income would be allocated to Hansen? Multiple choice question. $55,000 $40,000 $50,000 $60,000

$60,000

Limited partnership Limited liability partnerships S corporation

1. Has both general partners and limited partners 2. Protects innocent partners from malpractice or negligence claims of other partners 3. Provides all shareholders with limited liability, but allows them to elect to be treated as partnership for tax purposes

Determine the appropriate order of steps that should occur when liquidating a partnership (first to last).

1. Record sale of assets and any resulting gains or losses and allocate any gains or losses to the partners. 2. Pay all partner liabilities. 3. Distribute remaining cash to partners.

The partnership agreement of T. Chung and N. Patel states that the partners will share income and loss based on beginning capital balances. At the beginning of the year, Chung's capital balance was $30,000 and Patel's capital balance was $10,000. If net income during the period was $100,000, then the entry to close net income to Chung's capital account will include a credit to T Chung, Capital in the amount of $

Blank 1: 75000 or 75,000

The partnership agreement of Jaxson and Conway state that the partners share profits and losses equally. Prior to the liquidation, the partners' capital balances were $75,000 for Jaxson and $25,000 for Conway. The partnership assets were sold for a gain of $10,000. Assuming there are no deficits, Jaxson will receive $______ cash for the liquidation (after the assets are sold).

Blank 1: 80000

T. Dole invests cash and land into an existing partnership. The cash invested is $30,000 and the land has a fair market value of $60,000. The journal entry to reflect this transaction would include a credit to T. Dole, Capital in the amount of $

Blank 1: 90000

F. Yang invests $30,000 cash and equipment worth $50,000 into a partnership. The journal entry to record this transaction will include a credit to the F. Yang, ___________________account in the amount of $80,000.

Blank 1: Capital

A partnership ____________includes partners' names, rights, income and loss sharing agreement, withdrawal arrangement, dispute procedures, admission and withdrawal procedures and rights and duties in the event a partner dies. Listen to the complete question

Blank 1: agreement or contract

A partnership_____________ includes partners' names, rights, income and loss sharing agreement, withdrawal arrangement, dispute procedures, admission and withdrawal procedures and rights and duties in the event a partner dies.

Blank 1: agreement or contract

J. Jones sells one-half of his partnership to J. Denim for $5,000 cash. The entry to record this transaction will include a (debit/credit) ______to J. Denim, Capital.

Blank 1: credit

Just prior to final liquidation, Deanna agrees to pay her deficit capital balance of $2,000 to the partnership. The entry to record this transaction will include a (debit/credit) _________________ to Deanna, Capital in the amount of $2,000.

Blank 1: credit

J. Franklin, K. Perkins, and D. Winn are partners in a company that shares profits and losses equally. Winn withdraws and agrees to take $30,000 cash in settlement of his capital balance of $50,000. The entry to record this transaction will include a (debit/credit)_______________ to J. Franklin, Capital in the amount of $.

Blank 1: credit Blank 2: 10000

The partnership agreement of Martinez and Magden states that L. Martinez will receive 50% of all income and losses. During the current period, the company has net income of $70,000. To close the Income Summary account and give Martinez her share of net income, the partnership will (debit/credit) ___________the L. Martinez, Capital account for $__________________.

Blank 1: credit Blank 2: 35000, $35000, or 35,000

The partnership of Rhino and Chris agree that the partners will share profits and losses in a 75% to 25% ratio, respectively. Assets are sold for a gain of $10,000 The gain will be create a (debit/credit)__________ to Rhino, Capital in the amount of $____________.

Blank 1: credit Blank 2: 7500

After all assets are sold and liabilities are settled, the partnership of Bina and Niren is liquidated. Capital balances are $30,000 for Bina and $20,000 for Niren. Cash distributed is $50,000. The transaction to record the distribution of cash to Bina will include a (debit/credit) ________to Bina, Capital in the amount of $___________.

Blank 1: debit Blank 2: 30000

T. Hernandez withdraws from a partnership with four other partners. Hernandez agrees to take $40,000 cash in settlement of his capital balance of $30,000. The remaining $10,000 will be (debited/credited) ______ to the (remaining/withdrawing)______ partners' capital accounts.

Blank 1: debited Blank 2: remaining

T. Hernandez withdraws from a partnership with four other partners. Hernandez agrees to take $40,000 cash in settlement of his capital balance of $30,000. The remaining $10,000 will be (debited/credited)___________ to the (remaining/withdrawing) ___________partners' capital accounts.

Blank 1: debited Blank 2: remaining

A measure of partnership success that takes partner net income divided by average partner equity is called partner return on __________________.

Blank 1: equity

Partner return on equity is computed by taking partner net income divided by average partner ______________.

Blank 1: equity

A partnership that protects innocent partners from malpractice or negligence claims resulting from the acts of another partner is called a ________________partnership.

Blank 1: limited liability

The statement of partners' equity shows each partner's beginning capital balance, additional investments, allocated income or loss, partners' ________________(expenses, withdrawals), and ending capital balance.

Blank 1: withdrawals

The partnership agreement of C. Hahn and D. Barry states that Hahn receives 75% and Barry 25% of partnership income and losses. The partnership's net income is $100,000 and is allocated to the partners when the Income Summary account is closed. Which of the following will be credited to close the Income Summary account? Multiple choice question. D. Barry, Capital for $50,000 Net Income for $100,000 C. Hahn, Capital for $75,000 Income Summary for $100,000

C. Hahn, Capital for $75,000 Reason: Revenues and expenses are closed to income summary. Income summary is then closed to the partner's capital accounts.

C. Hernandez invests $15,000 cash into a partnership. The journal entry to record this investment would include a credit to the _______ account. Multiple choice question. C. Hernandez, Withdrawals Cash Notes Payable C. Hernandez, Capital

C. Hernandez, Capital

A. Scott withdraws from her partnership with three other partners and takes cash equal to her capital balance, in the amount of $13,000. The journal entry to reflect this transaction would include a credit to the _____ account? Multiple choice question. A. Scott, Withdrawal A. Scott, Capital Cash

Cash Reason: The Cash account is credited.

Zenner and Maddox operate a partnership with beginning-year capital balances of $20,000 each. During the year, Kramer joins the partnership by investing $10,000 cash. The journal entry to record Kramer's contribution would include a debit of how much and to which account? Multiple choice question. Kramer, Capital; for $30,000 Cash; for $30,000 Cash; for $10,000 Kramer, Capital; for $10,000

Cash; for $10,000

T. Thomas withdraws from his partnership with five other partners and takes cash equal to his capital balance, in the amount of $25,000. The journal entry to reflect this transaction would include which of the following? (Check all that apply.) Multiple select question. Debit to Cash Credit to Cash Debit to T. Thomas, Capital Credit to T. Thomas, Capital

Credit to Cash Debit to T. Thomas, Capital

Just prior to final liquidation, Feliza agrees to pay her deficit capital balance of $5,000 to the partnership. The entry to record this transaction will include which of the following? (Check all that apply.) Multiple select question. Debit to Cash Credit to Cash Credit to Feliza, Capital Debit to Feliza, Capital

Debit to Cash Credit to Feliza, Capital

S. Diaz and T. Sosa are partners with equal capital balances of $60,000 each. They agree to let J. Smith invest $30,000 in their partnership for a 10% interest, including bonuses to the existing partners. The journal entry to reflect this transaction will include which of the following items? Multiple choice question. Debit to Cash; $30,000 Credit to J. Smith, Capital; $30,000 Credit to Cash; $30,000 Debit to J. Smith, Capital; $30,000

Debit to Cash; $30,000

True or false: A partner can be admitted to a partnership by either selling his or her interest to another person, or distributing cash or other assets of the partnership to the partner in settlement of his or her interest. True false question.TrueFalse

False

Which of the following would not be shown on the statement of partners' equity? Multiple choice question. Federal income tax Additional investments Withdrawals Beginning capital balance Allocated income or loss

Federal income tax

A limited partnership has two classes of partners. Which of the following terms describe the two classes of partners? Multiple choice question. Limited partners and unlimited partners General partners and limited partners General partners and unlimited partners

General partners and limited partners

A new partner can be admitted to an existing partnership in which of the following ways? (Check all that apply.) Multiple select question. Investing cash in the partnership Purchasing interest from an existing partner Withdrawing cash from the partnership

Investing cash in the partnership Purchasing interest from an existing partner

After all assets are sold and liabilities have been settled, the partnership of Jose and Santiago is liquidated. Capital balances for Jose are $15,000 and Santiago are $30,000. Cash distributed is $45,000. The transaction to record the distribution of cash to Jose will include a debit to the _______ account in the amount of _______. Multiple choice question. Jose, Capital; $45,000 Jose, Capital; $22,500 Cash; $45,000 Jose, Capital; $15,000

Jose, Capital; $15,000

Identify the characteristics of a limited liability company. (Check all that apply.) Multiple select question. Limited liability Taxed similarly to a partnership Unlimited life Business is taxed

Limited liability Taxed similarly to a partnership

Two partners agree to share income based on the following—75% to Partner A and 25% to Partner B. They do not agree on how to share losses. Since there is no agreement on how to share losses they will be shared: Multiple choice question. Partner A 75%; Partner B 25% Based on capital balances Partner A 25%; Partner B 25% Partner A 50%; Partner B 50%

Partner A 75%; Partner B 25% Reason: If the partners agree on how to share income but not how to share losses, they share losses in the same way they share income.

Parthership LLC C corporation

Partnership - More than one owner allowed; owners have unlimited liabilityLLC - One or more owners; owners have limited liability; no business taxC corp - One or more owners; owners have limited liability; business is taxed

Identify the first step to take when liquidating a partnership. Multiple choice question. Allocate gains or losses to partners using income-and-loss-sharing ratios. Record the sale of noncash assets and any resulting gains or losses. Distribute remaining cash to partners based on capital balances. Pay or settle partner liabilities.

Record the sale of noncash assets and any resulting gains or losses.

A(n) _________ contains 100 or fewer stockholders and can elect to be treated as a partnership for tax purposes. The stockholders have limited liability. Multiple choice question. C corporation limited liability partnership limited liability company S corporation

S corporation

A(n) _________ contains 100 or fewer stockholders and can elect to be treated as a partnership for tax purposes. The stockholders have limited liability. Multiple choice question. limited liability company limited liability partnership C corporation S corporation

S corporation

A group of friends decide to create an S corporation. Which of the following features will be granted to the shareholders by making this election? (Check all that apply.) The business will be taxed. Shareholders will have limited liability. Shareholders will elect to be general partners or limited partners. Taxes will flow through shareholders like a partnership.

Shareholders will have limited liability. Taxes will flow through shareholders like a partnership.

T. Reed and S. Riley are partners with equal capital balances of $60,000 each. They agree to let R. Smith invest $30,000 in their partnership for a 25% interest, which means that R. Smith's beginning capital balance will equal $37,500 with each existing partner contributing a $3,750 bonus to Smith. The journal entry to reflect this transaction will include a debit in what amount and to which of the following accounts? Multiple choice question. Cash for $37,500 R. Smith, Capital for $20,000 T. Reed, Capital for $3,750

T. Reed, Capital for $3,750

True or false: A new partner is admitted to an existing partnership by purchasing an interest from a current partner or by investing assets in the partnership. True false question. True False

True

S. Wang and T. Wu are partners with equal capital balances of $50,000 each. They agree to let J. Li invest $20,000 in their partnership for a 10% interest, including bonuses to the existing partners. The journal entry to reflect the bonus to Wang will include a credit to _______ in the amount of ______. Multiple choice question. Cash; $5,000 Cash; $8,000 Wang, Capital; $5,000 Wang, Capital; $4,000 Wang, Capital; $8,000 Cash; $4,000

Wang, Capital; $4,000 Reason: 50,000+50,000=100,000. + 20,000 =$120,000. $120,000x.10=$12,000new $20,000-12,000=$8,000 divided equally between Wang and Wu = $4000 each.

S. Wang and T. Wu are partners with equal capital balances of $50,000 each. They agree to let J. Li invest $20,000 in their partnership for a 10% interest, including bonuses to the existing partners. The journal entry to reflect the bonus to Wang will include a credit to _______ in the amount of ______. Multiple choice question. Wang, Capital; $8,000 Cash; $4,000 Wang, Capital; $5,000 Cash; $8,000 Cash; $5,000 Wang, Capital; $4,000

Wang, Capital; $4,000 Reason: 50,000+50,000=100,000. + 20,000 =$120,000. $120,000x.10=$12,000new $20,000-12,000=$8,000 divided equally between Wang and Wu = $4000 each.

Question Mode Multiple Choice Question Z. Kim, A. Alam, and J. Jones are partners in a company that shares profits and losses equally. Jones withdraws and agrees to take $20,000 cash in settlement of his capital balance of $30,000. The entry to record this transaction will include a credit in what amount and to which of the following accounts? Multiple choice question. J. Jones, Capital for $30,000 Z. Kim, Capital for $5,000 Cash, for $30,000

Z. Kim, Capital for $5,000 Reason: The remaining partners will share equally in the $10,000 bonus.

The partnership of Zion, Graves, and Miro state that the partners will share profits and losses equally. Prior to liquidation, Miro has a deficit of $6,000 that she cannot pay. The other partners will absorb the deficiency. The journal entry to record this transaction will include a debit of how much to which of the following accounts? (Check all that apply.) Multiple select question. Zion, Capital for $3,000 Miro, Capital for $6,000 Zion, Capital for $6,000 Graves, Capital for $3,000 Graves, Capital for $6,000 Miro, Capital for $3,000

Zion, Capital for $3,000 Graves, Capital for $3,000 Reason: Graves, Capital for $3,000 and Zion, Capital for $3,000.

When liquidating a partnership, gains or losses from the sale of assets should be distributed to partners: Multiple choice question. based on income-and-loss-sharing ratio equally among all the partners based on capital balances

based on income-and-loss-sharing ratio

T. Bina and and M. Valley are partners with equal capital balances of $50,000 each. They agree to let R. Smith invest $20,000 in their partnership for a 25% interest, which means that Smith's beginning capital balance will equal $30,000, with each existing partner granting a $5,000 bonus to Smith. The journal entry to reflect Smith's new capital balance will include a (debit/credit) ______________to Smith, Capital in the amount of $.

credit, $30,000 ( R. Smith's beginning balance was $20,000 investment plus $10,000 bonus from current partners)

The partnership of T. Rios and L. Sioux agree that the partners will share profits and losses in a 75% to 25% ratio, respectively. Rios' capital balances is $10,000 and Sioux's capital balance is $5,000, prior to the liquidation. Assets are sold for a gain of $10,000. The gain will create a (debit/credit) _______ to Rio, Capital in the amount of _______. Multiple choice question. credit; $7,500 credit; $10,000 debit; $10,000 debit; $7,500 debit; $5,000 credit; $5,000

credit; $7,500

M. Garcia withdraws from a partnership with two other partners, K. Schmitt and L. Scott. Garcia agrees to take $20,000 cash in settlement of her capital balance of $30,000. The remaining $10,000 will be (debited/credited) _________ to the ______ account(s). Multiple choice question. debited; remaining partners' capital credited; Cash debited; withdrawing partners' capital credited; remaining partners' capital debited; Cash credited; withdrawing partners' capital

credited; remaining partners' capital

During a liquidation, capital deficiency means that at least one partner has a (debit/credit) ________________balance in his or her capital account at the point of final cash distribution.

debit

M. Capone sells one-half of her partnership to M. Harris for $30,000 cash. The entry to record this transaction will include a (debit/credit) _____________to M. Capone, Capital.

debit

The partnership of Roland, Simmons, and Kim state that the partners will share profits and losses equally. Prior to liquidation, Kim has a deficit of $5,000 that he cannot pay. The other partners will absorb the deficiency. The journal entry to record this transaction will include a (debit/credit) ________ to Roland, Capital in the amount of ______. Multiple choice question. credit; $2,500 debit; $5,000 credit; $5,000 debit; $2,500

debit; $2,500 Reason: The remaining two partners will absorb the deficiency equally, so each will have a debit of $2,500.

D. Sims withdraws from a partnership with two other partners. Sims agrees to take $20,000 cash in settlement of his capital balance of $15,000. The remaining $5,000 will be (debited/credited) _______ to the ______ account(s). Multiple choice question. credited; withdrawing partners capital account credited; Cash debited; remaining partners capital accounts credited; remaining partners capital accounts debited; withdrawing partners capital account debited; Cash

debited; remaining partners capital accounts

During a liquidation, capital ________ means that at least one partner has a debit balance in his or her capital account at the point of final cash distribution. Multiple choice question. deficiency bonus payout liability

deficiency

The ramifications of mutual agency include: Multiple choice question. mutual agency is an advantage to each partner the partners can limit the power of other partners to bind the partnership in contracts related to the partnership each partner cannot bind the partnership in contracts related to the partnership each partner can bind the partnership in contracts

each partner can bind the partnership in contracts

In the absence of an agreement on how to divide partnership income or loss, the partners share the income or loss of a partnership: Multiple choice question. based on the ratio of investments based on the ratio of capital balances equally

equally

A limited ________ form of business protects its members with limited liability, is taxed as a partnership, and has a limited life. Multiple choice question. liability partnership partnership liability company

liability company

A ________ partnership allows some partners to have limited liability. One partner must be a general partner, who assumes management duties and unlimited liability for the debts of the partnership. Multiple choice question. limited unlimited general

limited

A ________ is designed to protect innocent partners from malpractice or negligence claims resulting from the acts of another partner. Multiple choice question. limited partnership limited sole proprietorship corporation limited liability partnership

limited liability partnership

In partnership accounting, ownership rights are divided among partners. Each partner will use a capital account, withdrawal account, and be allocated ________ according to the partnership agreement. Multiple choice question. equity liabilities net income assets

net income

In partnership accounting, ownership rights are divided among partners. Each partner will use a capital account, withdrawal account, and be allocated ________ according to the partnership agreement. Multiple choice question. equity net income assets liabilities

net income

Taxes on a partnership are: (Check all that apply). Multiple select question. paid by the partnership. paid by each partner. paid by the partner only if distributed in cash. paid by the partners even though profit has not been distributed in cash.

paid by the partners even though profit has not been distributed in cash. paid by each partner.

Partner return on equity is computed by taking __________ divided by average partner equity. Multiple choice question. partner revenue partner current assets partner debt partner net income

partner net income

A measure of partnership success that takes partner net income divided by average partner equity is called: Multiple choice question. partner credit risk ratio partner return on equity partner debit to equity partner payout ratio

partner return on equity

A partnership agreement will include each of the following: Multiple select question. partner rights and duties tax payment duties date of partner dissolution Income and loss sharing names of partners

partner rights and duties Income and loss sharing names of partners

A __________ is an unincorporated association of two or more people who pursue a business for profit as co-owners. Multiple choice question. sole proprietorship corporation partnership

partnership

The characteristic that each partner can be legally required to pay the partnership debts even out of personal assets is referred to as Multiple choice question. mutual agency unlimited liability limited life

unlimited liability

The characteristic that each partner can be legally required to pay the partnership debts even out of personal assets is referred to as Multiple choice question. limited life unlimited liability mutual agency

unlimited liability Reason: Under unlimited liability each partner may be required to pay the partnership debts.

The partnership agreement of T. Chung and N. Patel states that the partners will share income and loss based on beginning capital balances. At the beginning of the year, Chung's capital balance was $30,000 and Patel's capital balance was $10,000. If net income during the period was $100,000, then the entry to close net income to Patel's capital account will include a credit to N. Patel, Capital in the amount of ________. Multiple choice question. $25,000 $50,000 $30,000 $10,000 $75,000

v$25,000

Partners are taxed on the partnership income: Multiple choice question. when the partnership receives the cash when income is earned whether or not the cash is distributed when the cash is distributed

whether or not the cash is distributed

A partner can _________ a partnership by selling his or her interest to another person. Multiple choice question. withdraw from liquidate be admitted to

withdraw from