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onelastime
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2014-12-12 21:00:38
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  1. The characteristic of a partnership where specific assets contributed by a partner lose their identity as to source and become shared property of the partnership is:
    B. Tenancy in partnership
  2. The characteristic of a partnership where a partner is an agent for other partners and the partnership when transacting partnership business is:
    C. Mutual agency
  3. Which of the following statements is true when comparing corporations and partnerships?
    D. Unlike shareholders, general partners may have liability beyond their capital balances
  4. A partnership that consists of two classes of partners, one that participates in management of the company and have unlimited liability, and another that does not participate in management and whose liability is limited to a stated amount is a:
    A. Limited partnership
  5. A partnership where all partners may participate in management of the company, but whose personal liability is limited to that resulting from their own actions or those who are acting under their direct supervision is a:
    C. Limited liability partnership
  6. Which of the following is not a characteristic of a partnership consistent with the proprietary theory?
    D. Partnership income taxes are paid
  7. Which of the following is not a characteristic of the proprietary theory that influences accounting for partnerships?
    C. A partnership is characterized by limited liability
  8. Which of the following is not an advantage of a partnership over a corporation?
    B. Unlimited liability
  9. Under the entity theory, a partnership is
    B. Viewed as having its own existence apart from the partners
  10. The articles of partnership should include all but the following:
    D. All of the above should be included in the articles of partnership
  11. The Uniform Partnership Act
    D. Serves as a default where there is no partnership agreement or where the partnership fails to address a matter
  12. Taylor and Tanner formed a partnership. Taylor contributed $50,000 in cash. Tanner contributed land and buildings he purchased for $50,000 some time ago. His tax basis in the property is now $30,000, although it was recently appraised for $70,000. There is a $15,000 mortgage attached to the building that the partnership will assume. What is the amount of Tanner's capital account after his contribution?
    D. $55,000
  13. Partnership drawings are
    A. Usually maintained in a separate account form the partner's capital account
  14. Partner Alta had a capital balance on January 1, 2008 of $45,000 and made additional capital contributions during 2008 totaling $50,000. During the year 2008, Alta withdrew $8,000 per month. Alta's post-closing capital balance on December 31, 2008 is $30,000. Alta's share of 2008 partnership income is
    C. $31,000
  15. For financial accounting purposes, assets of an individual partner contributed to a partnership are recorded by the partnership at
    C. Fair value
  16. When partnership profits are allocated based on partnership capital, the allocation should be based upon:
    D. Whatever has been established in the partnership agreement
  17. Which of the following best describes the use of interest on invested capital as means of allocating profits?
    D. The partnership agreement should clearly establish how invested capital is to be determined in the calculation of interest
  18. Partner A began the year with $20,000 in capital. On June 1, 2008, the partner contributed another $20,000. On September 1, 2008, the partner withdrew $15,000 from the partnership. Withdrawals in excess of $5,000 are charged to the partner's capital account. The partnership's fiscal year end is December 21. The annual weighted-average capital balance is
    C. $28,334
  19. Which of the following statements is true concerning the treatment of salaries in partnership accounting?
    A. Partner salaries may be used to allocate profits and losses; they are not considered expenses of the partnership
  20. Which of the following would be lest likely to be used as a means of allocating profits among partners who are active in the management of the partnership?
    D. Interest on average capital balances
  21. Maxwell is a partner and has an annual salary of $30,000 per year, but he actually draws $3,000 per month. The other partner in the partnership has an annual salary of $40,000 per month. What is the total annual salary that should be used to allocate annual net income among the partners?
    C. $70,000
  22. Partners active in a partnership business should have their share of partnership profits based on the following
    B. A combination of salaries and percentage of net income after salaries and any other allocation basis
  23. Ace & Barnes partnership has income of $110,000 and Partner A is to be allocated a bonus of 10% of income after the bonus, Partner A's bonus would be
    B. $10,000
  24. Partners A and B have a profit and loss agreement with the following provisions: salaries of $20,000 and $25,000 for A and B, respectively; a bonus to A of 10% of net income after bonus; and interest of 20% on average capital balances of $40,000 and $50,000 for A and B, respectively. Any remainder is split equally. If the partnership had net income of $88,000, how much should be allocated to Partner A?
    B. $44,500
  25. Maxwell is trying to decided whether to accept a salary of $60,000 or a salary of $25,000 plus a bonus of 20% of net income after the bonus as a means of allocating profit among the partners. What amount of income would be necessary so that Maxwell would consider the choices to be equal?
    D. $210,000
  26. Partners A and B have a profit and loss agreement with the following provisions: salaries of $30,000 and $45,000 for A and B, respectively; a bonus to A of 12% of net income after salaries and bonus; and interest of 10% on average capital balances of $50,000 and $65,000 for A and B, respectively. One-fourth of any remaining profits are allocated to A and the balance to B. If the partnership had net income of $108,600, how much should be allocated to Partner A?
    A. $43,225
  27. Maxwell is trying to decide whether to accept a salary of $60,000 or a salary of $25,000 plus a  a bonus of 20% of net income after salaries and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be $75,000. What amount of income would be necessary so that Maxwell would consider the choices to be equal?
    D. $310,000

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