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WorksheetsBASIC ACCOUNTING CUP-average
Total questions: 10
Worksheet time: 5mins
In a limited partnership, the entity ceases to legally exist:
An existing partner retires or dies
A new partner enters the partnership
A limited partner transfers his/her interest
A general partner is no longer present
Which of the following is not a similarity that exist between sole proprietorships and partnerships?
Neither requires approval by a state to form
Both can use an accounting method that does not conform to GAAP
Owners put the company’s income on the owner’s individual tax return
All of the above are similarities of sole proprietorships and partnerships
What theory of equity is applicable for partnerships?
Proprietary theory
Entity theory
A mix of proprietary and entity theory
Partnership theory
When can the bonus method be applied?
When partnership is formed
When a new partner is added to the partnership
When an existing partner retires from the partnership
The bonus method can be applied in all three of the above circumstances
1. D, E, and F are partners who share income in a 5:4:3 ratio. Each has a capital balance of P60,000. D retires from the partnership and is paid P95,000. In recording the retirement, no entry was made to E’s capital account. Which method of recording the retirement was used?
a. Bonus
b. Partial goodwill
c. Total goodwill
d. Transfer of asset
Bonus
Partial goodwill
Total goodwill
Transfer of asset
When shares with par value are sold, the excess of proceeds over the par value is credited to
Share capital
Share premium
Retained earnings
Gain on issuance of share capital
What is the meaning of net assets?
Contributed capital
Retained earnings
Shareholder’s equity
Legal capital
Detail of each class of share capital should be reported
On the face of the statement of financial position only
In disclosure notes only
On the face of the statement of financial position or in disclosure notes
On the face of the statement of comprehensive income and in disclosure notes
The par value of shares issued is normally recorded in
Additional paid in capital
Share capital account
Retained earnings account
Appropriated retained earnings account
Single Company issued 1,000 shares with P5 par to Taken as compensation for 1,000 hours of legal services performed. Taken usually bills P160 per hour of legal services. On the date of issuance, the share was trading on a public exchange at P140. By what amount should share premium increase as a result of the transaction?
135,000
140,000
155,000
160,000
