f profit is not enough to cover the salary and allowances, both will not be provided anymore both would still be provided in full and any excess would be a negative remainder allocated to the partners base on their agreement.

f profit is not enough to cover the salary and allowances, both will not be provided anymore both would still be provided in full and any excess would be a negative remainder allocated to the partners base on their agreement.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 3MC

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Similar questions

Any assets invested by a particular partner in a partnership ________. A. do not become a partnership asset but instead remain with the partner B. can be used only by the investing partner C. become the property of all the partners D. are the basis for all profit sharing
This answer is wrong . please give me the right answer.
Which of the following is true regarding capital deficiencies? O a Ob Oc Od The partners do not have a legally enforceable claim against the partner with the capital deficiency. If a partner with a capital deficiency is unable to pay the amount owed to the partnership, the partners with debit balances must absorb the loss. The loss is allocated based on the profit and loss ratios between the partners whether with credit or debit balances. if the partner with the capital deficiency pays the amount owed to the partnership, the deficiency is eliminated.
choose the response that correctly the following sentence about an individual partner's outside basis in a partnership. a partner's outside basis? (a) can be less than zero, (b) does not change as long as the partner maintains their partnership interest, (c) is used to apply the basis limitation to losses from a partnership, (d) must be tracked by the partnership.
If a partner who retired from the partnership receives less than the capital balance before retirement which also resulted to decrease in the capital balance of remaining partners, which is correct? a. The retiring partner receives bonus from remaining partners b. An impairment loss is recognized before the retirement c. Revaluation surplus is recognized before the retirement d. The retiring partner gives bonus to the remaining partner
Choose the response that correctly completes the following sentence about an individual partner's outside basis in a partnership. A partner's outside basis: Can be less than zero. Does not change as long as the partner maintains their partnership interest. Is used to apply the basis limitation to losses from a partnership. Must be tracked by the partnership.
In determining changes to a partner's outside basis, which of the following statements is false? All revenue items increase outside basis even if not taxable and all expenditure items reduce outside basis even if not deductible Only taxable income increases outside basis and only deductible expenditures reduce outside basis A reduction of a partner's share of liabilities reduces outside basis usually a partner will reduce outside basis by the inside basis of any property distribution received
In the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. Question 27 options: True False
What characteristics of a partnership justify the absorption by the other partners of the deficiency that cannot be made good by an insolvent partner? a. Limited life and mutual agency b. Limited life and co-ownership of property c. Mutual agency and partnership non-taxability d. Mutual agency and unlimited liability
If no agreement exists in a partnership as to the allocation of income, what method is appropriate?
A partnership agreement specifies salaries to partners, interest on partners' capital, and the remaining profits or losses shared in a fixed ratio. When the partnership profit is not sufficient to cover both salaries and interest, only interest is allocated to the partners. the entire profit is shared in a fixed ratio. only salaries are allocated to the partners. both salaries and interest are allocated to the partners.
Generally, gain is not recognized on contribution of appreciated property to a partnership. Which of the following situations may be an exception to that general rule? PICK ALL THAT APPLY!!! Question 1 options: The contributing partner contributes appreciated property to the partnership and shortly after receives a large distribution of cash from the partnership so that most of the partner's interest in the partnership is liquidated. The exchange appears to essentially be a partial sale of the property through the partnership form. The partner contributes appreciated property to a partnership and the partner is not in control of the partnership (over 50% ownership). A partner receives a capital interest for services performed for the partnership. The partner contributes a property to the partnership that is encumbered by a recourse liability, the partnership assumes the liability, and the net effect of these is to take…