? What accounting treatment is required when a companyconverts from partnership to corporation?a) Record all assets at market valueb) Continue partnership book values for all accountsc) Recognize goodwill for excess incorporation valued) Write off all partnership accounts

Explanation of Partnership: A partnership is a business organization where two or more individuals…

Answered: What accounting treatment is required…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 15MC: When a partnership dissolves, the first step in the dissolution process is to ________. A. allocate...

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When a partnership dissolves, the first step in the dissolution process is to ________. A. allocate the gain or loss on sale based on income sharing ratio B. pay off liabilities C. sell noncash assets D. divide the remaining cash among the partners
What is the first step in a partnership liquidation (termination and sale of assets)?
Which one of the following would not be considered in the development of a partnership agreement? A. profit and loss levels B. processing disputes C. stock options D. asset contributions
Which of the following is a disadvantage of the partnership form of organization? A. limited life B. no taxation at the partnership level C. flexibility in business operations D. combining of financial resources
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?
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
How does partnership accounting differ from corporate accounting? A. The matching principle is not considered appropriate for partnership accounting B. Partnerships report all assets at fair value as of the latest balance sheet data C. Revenues are recognized at a different time by a partnership that is appropriate for a corporation D. Individual capital accounts replace the contributed capital and retained earnings balances found in corporate accounting
Which one of the following statement is not correct on preparation of partnership final accounts? a. Adjustments will be recorded have dual effects in the income statement and statement of financial position b. Preparation of income statement is same as sole proprietorship business c. Net profit from income statement will be transferred to partners' capital account d. Accounting principles are same as sole proprietorship business
How does partnership accounting differ from corporate accounting? Multiple Choice Revenues are recognized at a different time by a partnership than is appropriate for a corporation. Individual capital accounts replace the contributed capital and retained earnings balances found in corporate accounting. The matching principle is not considered appropriate for partnership accounting. Partnerships report all assets fair value as of the latest balance sheet date.
Which of the following statements is correct with regard to drawing accounts that may be used by a partnership? Group of answer choices A. Drawing accounts establish the amount that may be taken from partnership by a partner in a given time period B. Drawing accounts are closed to the partners’ capital accounts at the end of the accounting period C. Drawing accounts appear on the balance sheet as a contra-equity account D. Drawing accounts are similar to Retained Earnings in a corporation.
In the liquidation of general partnership, which of the following claims shall be settled first by the liquidating partner? a. Capital contribution by the managing partner b. Advances made by capitalist partner to the partnership c. Share in profit by the industrial partner d. Employee benefits of workers
A partnership: A) Is also called a sole proprietorship. B) Has unlimited liability for its partners. c) Is legally required to have a written agreement. Dj Is a legal organization separate from its owners. E) Has owners called shareholders. Which of the following accounting principles prescribes that a company record its ex- penses incurred to generate the revenue reported? A) Going-concern assumption. B) Expense recognition (Matching) principle. cj Measurement (Cost) principle. D) Business entity assumption. E) Consideration assumption. Net Income: B) Represents the amount of assets stockholders put into a business. c) Equals assets minus liabilities. D) Is the excess of revenues over expenses. E) Represents stockholders' claims against assets. Distributions of cash or other assets by a business to its stockholders are called: A) Dividends. B) Expenses. C) Assets. D) Retained earnings. E) Net Income. A balance sheet lists: A) The types and amounts of the revenues and expenses of a…

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What accounting treatment is required when a company converts from partnership to corporation? a) Record all assets at market value b) Continue partnership book values for all accounts c) Recognize goodwill for excess incorporation value d) Write off all partnership accounts