LEARNING MODULESO CPALE Simulation Level 161. Cash settlements between and among2. When property other than cash is invested ina partnership, at what amount should thenon-cash property be credited to thecontributing partner's capital account?a. fair value at the date of contributionpartners to equalize their initial capitalcredits area. recorded in the partnership booksb. not recorded in the partnership booksc. accounted for as an additional investment to b. contributing partner's original costthe partnership or as withdrawals orinvestments from the partnershipd. a and c3. A partner who is entitled to a share of theprofits from a partnership is known asa. a salaried partnerb. a managing partnerc. an equity partnerd. a limited partner5. An advantage of the partnership as a form ofbusiness organization would bea. partners do not pay income taxes on theirshare in partnership incomec. assessed valuation for property tax purposesd. contributing partner's tax basis4. Which of the following is generally thoughtof as a benefit of partnership?a. limited lifeb. mutual agencyc. unlimited liabilityd. ease of formation6. The legal characteristic of a partnershipwhereby each partner is an agent of thepartnership and can bind the partnership tocontracts within the normal scope of thepartnership business is known asa. agreementb. mutual agencyC. contractd. partnershipb. a partnership is bound by the act of thepartnersc. a partnership is created by mere agreementsof the partnersd. a partnership may be terminated by thedeath or withdrawal of a partner7. Which of the following is not a characteristicof most partnerships?a. limited liabilityb. limited life8. The maximum number of persons who arelegally allowed to operate in a partnership isa.2c. mutual agencyd. ease of formationb. 20C. no limitd. 1009. Mr. Pand Ms. Q formed a partnership andagreed to divide the initial capital equallyeven though Mr. P contributed Pio0,000 andMs. Q contributed P84,000 in identifiableassets. The partners agree that thedifference in the amount of contribution and10. Mr. O and Ms. P formed a partnership andagreed to divide the initial capital equallyeven though Mr. O contributed P10o,000 andMs. P contributed P84,000 in identifiableassets. The partners agree that thedifference in the amount of contribution andthe amount of credit to the partner's capitalshall be treated as compensation for theexpertise that the partner will be bringing tothe partnership. How much is the correctvaluation of O's capital immediately after thepartnership formation?the amount of credit to the partner's capitalshall be treated as a cash settlementbetween the partners. The compound entryto record the partners' contributions includescredit to Q's capital account in the amount ofa. P84,000b. Р92,000C. P100,000d. Pi08,000a. P84,000b. P92,000c. P100,000d. P108,00081

Partnership is an agreement in which 2 or more individuals associate with each other to operate…

1. Cash settlements between and among partners to equalize their initial capital credits are a. recorded in the partnership books b. not recorded in the partnership books c accounted for as an additional investment to the partnership or as withdrawals or investments from the partnership C. d. a and c

1. Cash settlements between and among partners to equalize their initial capital credits are a. recorded in the partnership books b. not recorded in the partnership books c accounted for as an additional investment to the partnership or as withdrawals or investments from the partnership C. d. a and c

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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