WorksheetsChapter 12: Accounting for Partnerships - 20-Minute Quiz #1
Total questions: 27
Worksheet time: 14mins
An advantage of partnerships is mutual agency.
True
False
In a limited partnership, all of the partners have limited liability for the debts of the firm.
True
False
In a limited liability partnership, a partner can be held liable for the negligence of the people directly supervised by that partner.
True
False
In a partnership where the division of profits and losses is based on salaries, interest, and a stated ratio, if the salary and interest allocation will exceed the profit, the profit is allocated only by the stated ratio instead.
True
False
A partnership is considered an accounting entity for financial reporting purposes.
True
False
When the partnership contract does not specify the manner in which profits and losses are to be divided, profits and losses are distributed based on the average capital balances of each partner during the year.
True
False
The statement of partners’ capital explains the changes in each partner’s capital account and in total partnership capital during the year.
True
False
Admission of a new partner to the partnership does not result in the legal dissolution of the existing partnership.
True
False
If a partnership is admitting a new partner to the existing partnership and the existing partners are to receive a bonus, this bonus would be allocated on the basis of their capital balances.
True
False
Upon liquidation, once the assets have been sold and the creditors paid, the final cash is distributed equally among partners.
True
False
Which one of the following is not a feature of partnerships?
limited life
limited liability
mutual agency
co-ownership of property
B invests 60,000fora25 200,000 after admitting B. Which of the following is true?
B’s capital is $60,000.
B’s capital is $35,000.
B received a bonus of $10,000.
The original partners received a total bonus of $10,000.
Partners A and B receive a salary allowance of 12,000and 18,000, respectively, and share the remainder equally. If the company earned $20,000 during the period, what is the effect on A’s capital?
$12,000 increase
$7,000 decrease
$7,000 increase
$10,000 increase
After selling the assets and paying the creditors, the partnership had 90,000cashremaining.A,B,andChadcapitalbalancesof 20,000, 30,000and 40,000 respectively. Profit is shared on a ratio of 1:3:5, respectively. The cash to be received by partner C would be
$30,000.
$40,000.
$45,000.
$50,000.
Selling partnership assets and paying the proceeds to creditors and owners refers to
dissolution.
unlimited liability.
mutual agency.
liquidation.
On April 1, the Bruce & Duval partnership agreed to admit Singh to the partnership. Singh will receive a 40% share of the business for a cash investment of $200,000. Information regarding the partnership records prior to the admission of Singh is located in the table.
Bruce Duval
Capital balance 125,000 75,000
Profit sharing ratio 3 2
What is the correct journal entry to admit Singh into the partnership?
Cash 200,000
Singh, Capital 200,000
Cash 200,000
Singh, Capital 133,333
Bruce, Capital 40,000
Duval, Capital 26,667
Cash 200,000
Singh, Capital 160,000
Bruce, Capital 25,000
Duval, Capital 15,000
Cash 200,000
Singh, Capital 125,000
Bruce, Capital 50,000
Duval, Capital 25,000
According to the profit allocation table, what is the total profit to be allocated among Harlos, Maxwell, and Wellington?
$150,000
$120,000
$175,000
$200,000
How much salary allowance is allocated to Maxwell according to the table?
$45,000
$40,000
$50,000
$55,000
Match the following partners to their profit allocated as per the table:
$31,000
$55,500
$63,500
$63,500
$55,500
$31,000
On Dec. 31, what is the amount credited to Wellington, Capital in the Income Summary journal entry?
$31,000
$25,000
$40,000
$15,000
Which partner has the highest drawings amount to be closed according to the Drawings accounts entry?
Harlos
Maxwell
Wellington
What is the total capital after Singh's investment?
$400,000
$350,000
$450,000
$300,000
How much is the bonus to existing partners upon Singh's admission?
$40,000
$20,000
$60,000
$10,000
What is Singh's capital after admission?
$160,000
$120,000
$200,000
$140,000
How much of the bonus does Bruce receive?
$24,000
$12,000
$36,000
$48,000
How much of the bonus does Duval receive?
$16,000
$12,000
$20,000
$8,000
What is the journal entry to record the admission of Singh?
Debit Cash $200,000; Credit Bruce, Capital $24,000; Credit Duval, Capital $16,000; Credit Singh, Capital $160,000
Debit Cash $160,000; Credit Bruce, Capital $20,000; Credit Duval, Capital $20,000; Credit Singh, Capital $120,000
Debit Cash $200,000; Credit Bruce, Capital $16,000; Credit Duval, Capital $24,000; Credit Singh, Capital $160,000
Debit Cash $200,000; Credit Bruce, Capital $20,000; Credit Duval, Capital $20,000; Credit Singh, Capital $160,000
