In participation/partnership based contracts, __ is always subject to the ratio of investment while ___ distribution is based on pre-agreed ratio. Profit, Loss Loss, Loss Loss, Profit Profit, Profit
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In participation/
- Profit, Loss
- Loss, Loss
- Loss, Profit
- Profit, Profit
A Mudaraba is a non-binding contract. It means that Rab-ul-Maal or Mudarib, cannot terminate the partnership.
- True
- False
In Mudaraba profit is shared according to the pre-agreed proportion, while the loss has to be borne exclusively by the:
- Rabbul Maal
- Either Rabb ul Maal or Mudharib
- As per the agreed ratio between Rabbul Maal and Mudharib
- Mudharib
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- 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 resourcesWhich of the following case would allow the capitalization of Interest Expense -No Case allows this transaction -Provided the interest is immaterial -Only if Management Allows -Borrowing Cost If the partnership operations result to net loss, which of the following distribution schemes is correct? -Allocate the salaries and interest but not the bonus -Allocate the salaries, interest and bonus as per partnership agreement -Agreement as to salaries, interest and bonus are disregarded, distribute only the loss -Allocate the salaries only but not interest and bonus PFRS 5 defines a "disposal group" (i.e., that will be disposed through sale) to include: -non-current assets and some directly associated liabilities -current assets, non-current assets and some directly associated liabilities -non-current assets only -current and non-current assetsPartnership is the economic relationship between two or more persons: a. Who will not pay goodwill b. Who have agreed to not to share profit c. Who will not contribute capital d. Who have agreed to share profit
- If the partnership operations result to net loss, which of the following distribution schemes is correct? -Allocate the salaries and interest but not the bonus -Allocate the salaries, interest and bonus as per partnership agreement -Agreement as to salaries, interest and bonus are disregarded, distribute only the loss -Allocate the salaries only but not interest and bonus PFRS 5 defines a "disposal group" (i.e., that will be disposed through sale) to include: -non-current assets and some directly associated liabilities -current assets, non-current assets and some directly associated liabilities -non-current assets only -current and non-current assetsPartnership is the economic relationship between two or more persons: a. Who have agreed to share profit b. Who have agreed to not to share profit c. Who will not pay goodwill d. Who will not contribute capitaIn answering Partnership Operation problems, explain the detailed process of the following bases for division of profit: Arbitrary Ratio Capital Contribution Ratio Salaries, Interest and Bonus Example: Arbitrary Ratio is simply multiplying the agreed ratio with the ...........
- 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 FalseIf the income of a partnership is not sufficient enough to satisfy all of the provisions of the partnership’s profit-sharing agreement, how should this deficiency be handled?What 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’ salaries
- 10. In participation/partnership based contracts, ______ is always subject to the ratio of investment while _________ distribution is based on pre-agreed ratio. a. Profit, Profit b. Loss, Profit c. Profit, Loss d. Loss, LossGenerally, 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…Is the contract of partnership binding even without the stipulation of how to divide profit and losses?
