Raising large amounts of capital is more difficult for a partnership than for a corporation. (True or False) What term is used to describe the characteristic of a business entity where an individual(s) associated with an entity can not only lose all of his/her investment in the firm but personal assets can be taken to pay the debts of the firm if necessary? For federal income tax purposes, what term refers to the business entity not being a separate entity from the owners?
Raising large amounts of capital is more difficult for a partnership than for a corporation. (True or False) What term is used to describe the characteristic of a business entity where an individual(s) associated with an entity can not only lose all of his/her investment in the firm but personal assets can be taken to pay the debts of the firm if necessary? For federal income tax purposes, what term refers to the business entity not being a separate entity from the owners?
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 2DQ
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Raising large amounts of capital is more difficult for a partnership than for a corporation. (True or False)
What term is used to describe the characteristic of a business entity where an individual(s)
associated with an entity can not only lose all of his/her investment in the firm but personal assets
can be taken to pay the debts of the firm if necessary?
For federal income tax purposes, what term refers to the business entity not being a separate
entity from the owners? This type of entity is not taxed but the owner(s) must record the earnings
from the business on his/her individual income tax return.
What is the characteristic of a partnership that gives the authority to any partner to legally bind the
partnership and all other partners to business contracts called?
Assess the truth of this statement: The day-by-day transactions of a partnership are recorded in
accordance with the double-entry accounting concepts and are recorded exactly like transactions
in previous chapters except for those involving the owners' capital accounts and drawing accounts.
Assess the truth of this statement: For a partnership, when a transaction is first recorded (put in a
journal) every transaction affects at least two accounts, one account(s) will be debited and the other
account(s) will be credited.
Assess the truth of this statement: For a partnership, when journalizing using a general journal, if a
transaction has more than one account to debit and/or credit for the same transaction,all credit account(s)
are recorded first followed by the debit account(s).
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