College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 19, Problem 2MC
To determine
Identify the option that is correct for sharing the
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4. How shall the profits and losses of the partnership be distributed among the partners?
a. It should be divided equally.
b. It should be divided according to their profits and losses sharing agreement.
c. It should be divided proportionately in accordance with capital contribution.
d. It should be divided according to what type of partner they are.
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.
18. If the partnership agreement does not specify how income is to be allocated among the partners,
profits should be allocated:
a. In accordance with some pre-established ratio
b. In proportion to the weighted average of capital invested during the period
c. Equally
d. Equitably so that the partners are compensated for the time and effort expended on
behalf of the partnership
Chapter 19 Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Ch. 19 - Prob. 1TFCh. 19 - Prob. 2TFCh. 19 - Prob. 3TFCh. 19 - Prob. 4TFCh. 19 - Prob. 5TFCh. 19 - Prob. 1MCCh. 19 - Prob. 2MCCh. 19 - Prob. 3MCCh. 19 - Prob. 4MCCh. 19 - Prob. 5MC
Ch. 19 - Prob. 1CECh. 19 - Prob. 2CECh. 19 - Prob. 3CECh. 19 - Prob. 4CECh. 19 - Prob. 5CECh. 19 - Prob. 1RQCh. 19 - Prob. 2RQCh. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Prob. 1SEACh. 19 - Prob. 2SEACh. 19 - Prob. 3SEACh. 19 - Prob. 4SEACh. 19 - ENTRIES: PARTNERSHIP LIQUIDATION On liquidation of...Ch. 19 - Prob. 6SPACh. 19 - Prob. 7SPACh. 19 - Prob. 8SPACh. 19 - Prob. 9SPACh. 19 - STATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS...Ch. 19 - Prob. 1SEBCh. 19 - Prob. 2SEBCh. 19 - Prob. 3SEBCh. 19 - Prob. 4SEBCh. 19 - Prob. 5SEBCh. 19 - Prob. 6SPBCh. 19 - Prob. 7SPBCh. 19 - ENTRIES FOR DISSOLUTION OF PARTNERSHIP Cummings...Ch. 19 - Prob. 9SPBCh. 19 - STATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS...Ch. 19 - Prob. 1MYWCh. 19 - Prob. 1ECCh. 19 - Prob. 1MPCh. 19 - Prob. 1CPCh. 19 - Prob. 1COP
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Similar questions
- 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 ratearrow_forwardWhat is the purpose of a partnership appropriation account? A to avoid disagreements between the partners B to calculate residual profits for division between partners C to calculate the profit sharing ratio D to determine the amount of partners’ salariesarrow_forwardSalaries provided to partners are generally accounted for as:________ a. Part of the cost of revenues of the partnership b. An operating expense of the partnership c. A profit-sharing mechanism d. Permanent withdrawals of the partnersarrow_forward
- Distinguish between admission of a new partner to a partnership (a) via the acquisition of an interest from another partner and (b) through the transfer of assets to the partnership.arrow_forwardWhich of the following is correct with regards to partnership liquidation? a. All creditors must be paid in full before distributions can be made to partners b. Partners’ capital contributions and undistributed partnership income are viewed as distinct in the Uniform Partnership Act c. All creditors are equal with regards to priority claim against partnership assets d. Loans from partners to the partnership have same priority claim against partnership assets as to creditor claims from other entitiesarrow_forwardis it true or false? Explain Unless stated otherwise,in the partnership contract,profits and losses are shared among the partners in the ratio of their capital equity balances.arrow_forward
- I. The partnership contract, binds the partners to contribute money, property, or industry to a common fund with the intention of dividing profits equally. II. The partnership personality is distinct and separate from that of its partners. A. BOTH STATEMENTS ARE TRUE B. ONLY THE 1ST STATEMENT IS FALSE C. BOTH STATEMENTS ARE FALSE D. ONLY THE 1ST STATEMENT IS TRUEarrow_forwardIn a partnership, distinguish between the goodwill and bonus methods.arrow_forwardThe following are rights of a partner in a partnership, except one: Right to compensation Right to information Right to return of capital Right to agencyarrow_forward
- Which of the following is NOT a characteristic of a partnership? a. Partners have mutual agency b. Partners are able to contract on behalf of the partnerships. c.Partnership income is tax free d.Partnerships are easy to formarrow_forwardA partnership agreement should include each of the following except Basis for sharing net income or loss names and capital contributions of partners. Chart of accounts for the partnership. rights and duties of partners. A Moving to another question will save this response. ch DELLarrow_forwardThe characteristic of a partnership where a partner is an agent for other partners and the partnership when transacting partnership business is: a. a fiduciary relationship b. tenancy in partnership c. mutual agency d. the proprietary theoryarrow_forward
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