Prior to the creation of a partnership, the sole proprietor must first re-evaluate or adjust its business's assets and liabilities. In what account must all revaluations or adjustments be made? O Drawing Account O Capital Account O Income Summary O Revaluation Surplus

Prior to the creation of a partnership, the sole proprietor must first re-evaluate or adjust its business's assets and liabilities. In what account must all revaluations or adjustments be made? O Drawing Account O Capital Account O Income Summary O Revaluation Surplus

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3PA: When a partnership is liquidated, any gains or losses realized by the sale of noncash assets are...

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A well written partnership agreement should include each of the following except ________. A. how to settle disputes B. the name of the partnership C. division of responsibilities D. Partners individual tax rate
What is the first step in a partnership liquidation (termination and sale of assets)?
When a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income sharing ratio. Why?
Which of the following items is generally reported separately on a partnership return? a.Factory rent expense b.Interest expense on business debts c.Ordinary income from the operations of the partnership business d.Net rental income e.Bonus depreciation
Partners' share of net income is recognized in the accounts through Accrual entries a. O b. Adjusting entries O c. Closing entries O d. Correcting entries
MC: Topic: Income Taxation Which of the following is considered a “constructive receipt” of gross income? * A partner’s share in the income of the general professional partnership is credited to his capital account. Payment for the sale is deposited by buyer to the seller’s bank account. Cancellation of debt of employee by employer in consideration of friendship. A and B only All of the above
Accounting In the liquidation of a partnership, a loan from a partner a. Will be paid off at the same time as payment of other liabilities of the partnership b. Will be paid off before distribution of cash to partners for their capital investments c. Will be closed to the partner's drawing account d. Will be written off
Which of the following is considered a "constructive receipt" of grss income? * a. A partner's share in the income of the general professional partnership is credited to his capital account. b. Payment for the sale is deposited by buyer to the seller's bank account. c. Cancellation of debt of employee by employer in consideration of friendship. d. A and B only O e. All of the above
What is a key distinction in the presentation of the Income Statement in a Partnership? O presentation of Gross Profit it includes a presentation of how profit is divided among partners O presentation of notes in the Income Statement classification of expenses into Selling and Administrative expenses
Which financial statement of a partnership reflects the profitability of the business? A. Statement of Financial Position B. Statement of Cash Flows C. Statement of Comprehensive Income D. Statement of Changes in Equity
The accounting treatment of capital invested in partnership business will be? a. Debited to cash account b. Credited to cash account c. Debited to profit and loss appropriation account d. Debited to partners' capital account
In case of admission of a partner, the first adjustment that need to be prepared is?? A. Bank account B. Profit and loss account adjustment C. The revaluation of assets D. Realization of income or loss S1: In a partnership, at least one partner is required to be a/an limited partner in order to ensure partnership creditors will be paid and protected S2: Unpaid liabilities should be included in computing for the total loss attributed to the partners. * A. Both statements are true B. s1 True; S2 False C. S2 True; S1 False D. Both statements are false S1: Joint Control is present if tow ore more parties have greater than 50% Control.S2: One Party has more than 50% in a joint arrangement * A. Both statements are false B. Both statements are true C. S2 True; S1 False D. s1 True; S2 False S1: If the total contributed capital of THE partnership is greater than the total agreed capital, it is possible that a goodwill be recognized or an undervaluation of asset occurred.S2: Noncash…