Accounting Quiz on Partnerships

What is the primary purpose of a partnership agreement?

• To determine the lifespan of the partnership

• To outline the responsibilities of each partner

• To divide profits among partners

• To establish a legal entity

Which of the following is NOT a characteristic of a partnership?

• Shared ownership

• Profit sharing

• Joint decision making

• Limited liability

What is the term used for the goodwill of a company?

• Investments

• Liabilities

• Assets

• Reputation

In a partnership, how can profits be distributed?

• Based on investment

• Equally among partners

• Based on work contribution

• All of the above

What is the first step in the liquidation process of a partnership?

• Distributing remaining cash

• Selling all assets

• Paying off debts

• Closing nominal accounts

What is the minimum requirement for a written partnership agreement?

• It must be notarized

• It must be filed with the government

• It must include the business field

• It must be signed by all partners

If a partner dies, what is the first action to take regarding the partnership's accounts?

• Transfer ownership to heirs

• Calculate profits until the date of death

• Notify the government

• Close all accounts immediately

What is the formula for calculating a partner's salary in a partnership?

• Based on hours worked

• Total profit divided by number of partners

• Percentage of total investment

• Fixed monthly amount

What does 'goodwill' represent in a partnership?

• Investment returns

• Debt obligations

• Intangible value

• Physical assets

How is the capital contribution of a new partner typically recorded?

• As a liability

• As an asset

• As goodwill

• As equity