Accounting 2 Activity

How does a partnership get started?

• The partners reach an agreement and begin operations.

• The partners register under the Uniform Partnership Act.

• The partners get a charter from the state.

• All of the above

Which characteristic identifies a partnership?

• Limited personal liability

• Unlimited life

• No business income tax

• No business income tax

Which of the following corporate characteristics is a disadvantage of the corporate form of business?

• Limited liability

• Double taxation

• No mutual agency

• Transferability of ownership

Abbott and Brown form a partnership. Abbott contributes $10,000 cash and $40,000 in inventory. Brown contributes $5,000 in cash and land with a current market value of $30,000 (cost of $15,000). Which of the following is correct?

• Brown, capital is credited for $20,000

• Brown, capital is credited for $35,000.

• Brown, capital is debited for $20,000.

• Brown receives a bonus of $30,000 from Abbott.

Partnership financial statements report

• net income on the balance sheet.

• revenues on the income statement

• liabilities on the income statement.

• expenses on the balance sheet.

..................is an association of two or more persons to carry on as co-owners of a business for profit

• Partnership

• corporation

• sole preprietorship

• bank

the partnership agreement is

• fixed whenever a partner withdraw or a new partner is admitted

• change whenever a partner withdraw or a new partner is admitted

• fixed when a partner withdraw and change when a new partner is admitted

• change when a partner withdraw and is fixed when a new partner is admitted

general partners can

• raise cash without involving outside investors in management of business

• withdraw cash without involving outside investors in management of business

• involve outside investors in management of business

• raise cash and involve outside investors in management of business