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. S2 True; S1 False b. Both are false c. S1 True; S2 False d. Both are true

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. S2 True; S1 False b. Both are false c. S1 True; S2 False d. Both are true

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 5BCRQ

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Question

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. S2 True; S1 False

b. Both are false

c. S1 True; S2 False

d. Both are true

2. If the total contributed capital of the partnership is greater than the total agreed capital, which of the following may arise:

a. Overvaluation of Assets

b. All of the choices

c. Undervaluation of Assets

d. Goodwill

Definition Definition Amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item

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