. S1: The dissolution of a partnership occurs only when the partnership is terminating operations and going out of business. S2: Bonus paid to a new partner result in a reduction to the capital accounts of the existing partners in proportion to their capital ratio. a. S1 is false, S2 is true b. Both statements are true c. Both statements are false d. S1 is true, S2 is false

. S1: The dissolution of a partnership occurs only when the partnership is terminating operations and going out of business. S2: Bonus paid to a new partner result in a reduction to the capital accounts of the existing partners in proportion to their capital ratio. a. S1 is false, S2 is true b. Both statements are true c. Both statements are false d. S1 is true, S2 is false

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assess the truth of this statement: The transaction of a partnership that is recording cash invested by a partner should be recorded as a debit to cash and a credit to the individual partner's drawing account. O This statement is true. O This statement is false. O There is not enough information to determine whether or not this statement is true. O This statement is not applicable to accounting concepts.
S1: When two or more proprietors form a partnership, one may maintain his own books as the partnership books. Accordingly, only the other partners need to adjust and close their accounts. S2: When one of the partners retain his books as the books of the partnership, still, he should also close his accounts and record his investments both statements are true both are false only S1 is true only S2 is true.
NOTE AI ANSWER EXPERT SOLUTION
A Moving to another question will save this response. Question 1 When a new partner is added to an existing partnership, the underlying business operations must close and reopen. O True False A Moving to another question will save this response.
one who is limited as to how many partnerships he or she can a partner When a partner chooses to leave a partnership and the business continues with the remaining partners, this is called O dissociation O dissolution O disillusion O depression
Identify the correct statement/s from the following:I. In absence of partnership agreement, no interest on capital is allowed II. In absence of partnership agreement, 6% interest on partner's loan is allowed O a. Statement II only correct O b. Statement I only correct O c. Both Statements are correct O d. Both Statements are wrong
KINDLY ANSWER THE FIVE QUESTIONS. THANK YOU! 1.S1: Partnership profits and losses (including bonuses and revaluations) are allocated in accordance with their Profit and Loss Ratio. S2: If only the share in the profits have been established in the articles of partnership, then the share in the losses must be in accordance with their profit ratio.* a. S1 True; S2 False b. Both are false c.Both are true d. S2 True; S1 False 2. If the total contributed capital of the partnership is greater than the total agreed capital, which of the following may arise:* a. Undervaluation of Assets b. Overvaluation of Assets c. All of the choices d. Goodwill 3. Bonuses to the old partners arise under each of the following circumstances, except:* a.Withdrawal of a partner and the interest is purchased by the partnership b.Total contributed capital of the new partner is more than the agreed capital c. Agreed bonus in the distribution of partnership net income d. Purchase of Interest by a new partner 4. Which…
PB3. LO 15.5 Match each of the following descriptions with the appropriate term related to partnership accounting. A. Each and every partner can enter into contracts on behalf of the partnership i. liquidation B. The business ceases operations. ii. capital deficiency C. How partners share in income and loss iii. admission of a new partner D. Adding a new partner by contributing cash iv. mutual agency E. A partner account with a debit balance v. income sharing ratio
PARTNERSHIP DISSOLUTION True or False _______1. Insolvency, insanity, or incapability to perform by a partner may cause the dissolution of the firm. _______2. Dissolution and liquidation mean the same thing. _______3. Asset revaluation may be recognized for the current partners when the new equity is greater than the original partners' equity. _______4. Dissolution may not necessarily change the basic function or operation of the partnership. _______5. Dissolution always immediately causes the termination of a firm. _______6. An admission of a new partner causes a change in the ownership interest of the original partners. _______7. Ownership may be transferred at will by anyone partner without consulting the other partners. _______8. Bonus is, in effect, transfer of capital from one partner to another partner. _______9. Recognizing undistributed profit or loss share of the partners at dissolution date is necessary in effecting dissolution. _______10. ABC Partnership decided to admit D…
7 Which of the following rules apply/s in case of absence of partnership deed? a. No interest on capital Only b. No salaries and No interest on capital c. None of the options d. No salaries Only Clear my choice
27 Statement I: When a partner sells an interest to a new partner at an amount that exceeds the carrying amount of the equity sold, the difference is recognized as a personal gain of the selling partner from the transaction. Statement II: The amount of net assets invested of a new partner into an existing partnership is not always equal to the amount credited to his capital account. O True, true Faise, false Fase, true O True false
3. Suppose A, B, and C are not really partners, but A told X that A, B, and C are partners. X, believing the representation made by A and consented to by B, extend ed credit to A. What type of partnership was described? Explain.