Acc. chapter 12

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which of the following statements about a partnership is correct?

a partnership represents an accounting entity for financial reporting purposes

which of the following would not be recorded in the entry for the formation of a partnership

accumulated depreciation

If the partnership agreement specifies salaries to partners, interest on partners' capital, and the remainder on a fixed ratio, and partnership net income is not sufficient to cover

both salaries and interest are allocated to the partners

the basis for dividing partnership net income or net loss is referred to as any of the following except the

capital ratio

The admission of a new partner to an existing partnership

causes a legal dissolution of the legal existing partnership

When a partner invests noncash assets in a partnership, the assets are recorded at their

fair value

the partner in a limited partnership that has unlimited liability is referred to as the

general partner

When a partnership interest is purchased

the transaction is a personal transaction between the purchaser and the selling partner(s)

How many closing entries are required for a partnership?

4

partnership income ratios can be expressed as a

all answer choices proportion percentage, and fraction

in a partnership, mutual agency means

an act by a partner is judged as binding on other partners depending on whether the act appears to be appropriate for the partnership.

the individual assets invested by a partner in a partnership

are jointly owned by all partners

a partner's share of net income is recognized in the accounts through

closing entries

the largest companies in the U.S are primarily as

corporations

Which of the following would not cause an increase in partnership capital?

drawings

In the liquidation of a partnership, any partner who has a capital deficiency

has a personal debt to the partnership for the amount of the deficiency

a general partner in a partnership

has unlimited liability for all partnership debts

a partnership

is dissolved upon the acceptance of a new partner

limited partnerships

must have at at least one general

which of the following is not an advantage of the partnership form of business

mutual agency

Which of the following statements is correct?

neither salaries to partners nor interest on partners' capital are expenses of the partnership

In the final step of the liquidation process, remaining cash is distributed to partners

on the basis of the remaining capital balances

which of the following statements is incorrect regarding partnership agreements?

oral agreement are preferable to written articles

the owner's equity statement for a partnership is called the

partner's capital statement

which of the following would not be considered an expense of a partnership in determining income

salary allowance to partners

The first step in the liquidation of a partnership is to

sell noncash assets and recognize a gain or loss on realization

the partnership agreement should include each of the following except

surviving family members in the events of a partner's death

The liquidation of a partnership

terminates the business

a partners' capital statement explains

the changes in each partner's capital account and in total partnership capital during a period

Which of the following statements is true regarding the form of a legally binding partnership contract?

the partnership contract may be based on a handshake


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