Accounting for Partnerships

Which of the following is NOT a principal characteristic of a partnership as described in the textbook?

According to the textbook, when a partner invests noncash assets into a partnership, at what value should those assets be recorded?

What does the term 'mutual agency' imply in a partnership context?

If a partnership agreement does not specify how income and losses are to be divided, what is the default basis for sharing?

What is the primary purpose of a partnership's schedule of cash payments during liquidation?

In the liquidation of a partnership, what is the term for the sale of noncash assets for cash?

In the Kingslee Company example on page 541, a net income of $22,000 is divided. Sara King had a beginning capital of $28,000 and Ray Lee had $24,000. They receive salary allowances of $8,400 and $6,000 respectively, 10 percent interest on beginning capital, and the rest is shared equally. What is the total amount of income allocated to Sara King?

What happens in the case of a partnership's income deficiency, as shown in Illustration 12-6, where salary and interest allowances exceed net income?

What is a key difference between a Limited Partnership (LP) and a Limited Liability Partnership (LLP)?

A partner's capital account is debited for all of the following EXCEPT:

What is the correct sequence of steps in a partnership liquidation?

In the liquidation of Ace Company, noncash assets with a book value of $60,000 are sold for $75,000 cash. What is the first entry made in this process?

What is the final basis for distributing remaining cash to partners during a liquidation?

When a new partner is admitted by purchasing an interest from an existing partner, what is the effect on the partnership's total net assets and total capital?

A bonus to old partners occurs upon the admission of a new partner when:

The Bart-Cohen partnership has total capital of $120,000. Lea Eden invests $80,000 for a 25 percent ownership interest. What is the bonus to the old partners?

What is a capital deficiency in the context of partnership liquidation?

If a partner with a capital deficiency is unable to pay, how is the deficiency allocated?

In the RST partnership, Roman, Sand, and Terk have income ratios of 3:2:1. Terk withdraws and is paid $25,000 from the firm when her capital balance is $20,000. What is the bonus paid to Terk?

Following the scenario in the previous question where Terk receives a $5,000 bonus, how is this bonus allocated to the remaining partners, Roman and Sand?

What is the owners' equity statement for a partnership called?

A. Rolfe contributes equipment to a partnership. The equipment had a book value of $3,000 (cost $5,000 less accumulated depreciation $2,000) on Rolfe's books. The fair value of the equipment is $4,000. What is the journal entry for the partnership to record this investment?

What is partnership dissolution?

Partnerships are required to file which of the following tax documents?

Which closing entry is unique to a partnership compared to a proprietorship?

The partners of Grafton Company, Kale, Croix, and Marais, have income ratios of 2:3:3. They sell noncash assets for $115,000 that have a book value of $85,000. How much of the gain is allocated to Croix?

When a withdrawing partner is paid from the personal assets of the remaining partners, how is the transaction recorded on the partnership's books?

A bonus is paid to a retiring partner from partnership assets. The entry to record this withdrawal and bonus will include which of the following?

Which business form is described as a hybrid having features of both a corporation and a limited partnership?

In the RST partnership, Roman, Sand, and Terk have capital balances of $50,000, $30,000, and $20,000 respectively. Terk retires and is paid $16,000 from partnership cash. The income ratios are 3:2:1. What is the journal entry to record Terk's withdrawal?

What is the primary function of a partnership agreement?

In a partnership liquidation, if a partner has a capital deficiency and is unable to pay it, what is the effect on the partnership?

Which financial statement for a partnership is identical to that of a proprietorship, except for the division of net income?

When Lea Eden is admitted to the Bart-Cohen partnership by investing $20,000 for a 25 percent capital credit of $35,000, what is the bonus to Eden?

Partners' salary allowances and interest on capital are considered:

What does 'unlimited liability' mean for a general partner?

In the liquidation of Ace Company with a capital deficiency, W. Eaton has a capital deficiency of $1,800 that he is unable to pay. The income ratios for the remaining partners, R. Arnet and P. Carey, are 3:2. How is Eaton's deficiency handled?

In a Limited Liability Partnership (LLP), who is protected from the malpractice of another partner?

The partners' capital statement for Kingslee Company shows a total of $76,000 in the 'Total' column before drawings are deducted. If total drawings are $12,000, what is the total capital at the end of the period?

When admitting a new partner by investment, which of the following is true?

What is one of the main business reasons a bonus might be paid to old partners upon admission of a new partner?

When a withdrawing partner is paid more from partnership assets than their capital balance, the difference is considered a:

The LeeMay Company has net income of $57,000. Partners Lee and May have salary allowances of $15,000 and $12,000, respectively. The remainder is split 60:40. What is the total income allocated to Lee?

The articles of co-partnership should specify all of the following EXCEPT:

Which of the following is a major disadvantage of a regular partnership?

In the Ace Company liquidation, after selling noncash assets and paying liabilities, the final capital balances are Arnet, $22,500; Carey, $22,800; and Eaton, $3,700. Cash on hand is $49,000. How much cash does Carey receive in the final distribution?

When a retiring partner receives a bonus from the remaining partners, what does this imply?

The closing entry for a partner's drawings account involves:

Partnership income is not taxed at the partnership level. Instead, each partner's share is taxable at personal tax rates. What is this concept often called?

If a partnership is liquidated and noncash assets are sold for less than book value, what is the effect on the partners' capital accounts?