1. Which is a deductible expense in determining the net income of the partnership? * -Interest on partner’s loan -Salaries of manager employed by the partnership -Office supplies used in the partners’ offices -all of the above -answer not given

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter21: Partnerships
Section: Chapter Questions
Problem 6BCRQ
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1. Which is a deductible expense in determining the net income of the partnership? *

-Interest on partner’s loan
-Salaries of manager employed by the partnership
-Office supplies used in the partners’ offices
-all of the above
-answer not given
 
2.
The following partners would share in the losses of partnership operations, except: *
-Capitalist partner
-industrial partner
-capitalist industrial partner
-limited partner
-both the industrial partner and capitalist industrial partner
 
3. [S1] If partnership operation resulted to a loss, the income summary account shall be closed to by crediting the individual partner’s capital. [S2] In the absence of any agreement, partnership losses shall be divided in the same proportion of the agreed division of profits. *
-both are true
-both are false
-S1 is true
-S2 is true
 
4. [S1] The form and content of the statement of operations of a partnership is similar to a sole proprietorship except for the inclusion of income tax expense to arrive at net income. [S2] The form and content of the statement of capital of a partnership is similar to a sole proprietorship with no exception. 
-both are true
-both are false
-S1 is true
-S2 is true
 
5.Which statement is incorrect?
-An industrial partner’s contribution shall be credited to his capital account at fair value of services he extended to the partnership.
-All partnerships should have at least 1 general partner.
-Salaries and interest on capital given to partners are not considered as partnership expenses but rather as only a means of distributing partnership net income.
-Partnerships, just like corporations, are subject to regular income tax rate, except for general professional partnerships.
-None of the above

 
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