Reference no: EM132322418
Question
1.) The profits of a general partnership
pass through the business to the partners.
cannot exist unless the partnership has a limited partner.
are not taxable unless the partnership has over $250,000 in net income.
are not taxable.
2.) Richard invests $20,000 cash and Roxanne invests $30,000 cash in their new partnership. Which of the following is the balance in Richard's capital account?
$20,000
$30,000
$15,000
$25,000
3.) An individual partner's signing of a contract to buy coffee for a doughnut shop that the partnership owns and operates falls under which characteristic of partnerships?
co-ownership of property
mutual agency
limited life
unlimited liability
4.) A limited partnership
none of the above
is illegal in most states.
must have at least one general partner.
must have at least two general partners.
5.) The characteristic of partnerships that states that every partner can bind the business to a contract within the scope of the partnership's regular business operations is called
co-ownership of property.
limited life.
unlimited liability.
mutual agency.
6.) Betty invests equipment with a cost of $100,000 and accumulated depreciation of $30,000 in a new partnership. The current value of the equipment is $105,000. The replacement value of the equipment is $135,000. At what amount would the equipment be recorded in Betty's capital account?
$70,000
$105,000
$135,000
$100,000
7.) The partnership characteristic of co-ownership of property states that
any asset a partner invests in the partnership becomes the joint property of all the partners.
general partners co-own all assets, but limited partners do not.
all partnership assets are co-owned by any banks making loans to the partnership.
general partners own a larger percentage of the assets of a partnership than do limited partners.
8.) Trevor's share of net income is $45,000 and Diane's share of net income is $15,000. Which of the following would be included in a closing entry as a result of these allocations?
Trevor's capital account would be debited for $45,000.
The income summary would be debited for $60,000.
Trevor's capital account would be credited for $15,000.
Diane's capital account would be credited for $15,000.
9.) Investments of assets into a partnership are recorded at their
current market value.
original cost.
original cost plus a percentage adjustment to account for inflation.
book value.
10.) Which of the following partnership characteristics causes each partner to have personal liability for the debts of the partnership?
co-ownership of property
limited life
unlimited liability
mutual agency