Answered: Bonus, as a compensation for good…

Bonus, as a compensation for good performance, occurs only when there is a favorable partnership operation. O True False

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3MC: Which of the following is a disadvantage of the partnership form of organization? A. limited life B....

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Bonus, as a compensation for good performance, occurs only when there is a favorable partnership operation.
O True
False

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When a partner withdraws from a partnership and the value of the assets paid tothe partner by the partnership is greater than the balance in his capital account, thepartnership is, in effect, paying the withdrawing partner a bonus. TRUE OR FALSE?
When the partnership agreement specifically provides for salaries and interest, the provision must be applied before the remainder of profit or loss is divided True False
Which one of the following is not an advantage of partnership? a. Less profit because profit is shared b. Increased capital c. Increased knowledge and specialist skills d. Shared risk
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Generally, gain is not recognized on contribution of appreciated property to a partnership. Which of the following situations may be an exception to that general rule? PICK ALL THAT APPLY!!! Question 1 options: The contributing partner contributes appreciated property to the partnership and shortly after receives a large distribution of cash from the partnership so that most of the partner's interest in the partnership is liquidated. The exchange appears to essentially be a partial sale of the property through the partnership form. The partner contributes appreciated property to a partnership and the partner is not in control of the partnership (over 50% ownership). A partner receives a capital interest for services performed for the partnership. The partner contributes a property to the partnership that is encumbered by a recourse liability, the partnership assumes the liability, and the net effect of these is to take…