BUAD 121 - Ch. 12

Which of the following is a disadvantage of the general partnership form of business organization?

• mutual agency

• easily formed

• fewer government regulations

• easier decision making

The division of the partnership profit or loss

• is a financial statement.

• is not disclosed as a separate schedule.

• is not disclosed in a note to the financial statement.

• is a schedule.

The partners' drawings accounts are

• reported on the income statement.

• reported on the balance sheet.

• closed to Income Summary.

• closed to the partners' capital accounts.

When a partnership interest is purchased from an existing partner,

• each partner’s capital account is affected.

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

• the buyer receives equity equal to the amount of cash paid.

• all partners will receive some part of the purchase price.

When admitting a new partner by investment, a bonus to old partners is allocated on

• the basis of capital balances.

• the basis of the original investment of the old partners.

• the basis of profit ratios before the admission of the new partner.

• the basis of the salaries of the old partners.