TRUE OR FALSE or FalseTrue rue if the statement is correct and False if the statement is wrong.The new partner will never ręceive a bonus when they join the partnership.2 Partnership assets should always be revalued when a new partner is admitted.3. Majority consent of partners is needed to admit a new partner.4. Dissolution is always preceded by liquidation.5: Dissolution can occur when a new partner enters the partnership or anexisting partner leaves the partnership.6. A new partner's liability for actions that occurred before joining thepartnership is limited to the amount invested in the partnership.7. : A new partner cannot be admitted into a partnership without the consent of allexisting partners.8. It is possible to admit new partner without any cash or property invested inthe partnership.9. The new partner capital interest may increase by his share of the revaluationof assets under revaluation method.10. The termination of business is not a requirément for dissolution.

Basic Concept of Partnership Accounting

Wihe new partner will never receive a bonus when they join the partnership. . Partnership assets should always be revalued when a new partner is admitted. 3 Majority consent of partners is needed to admit a new partner.

Wihe new partner will never receive a bonus when they join the partnership. . Partnership assets should always be revalued when a new partner is admitted. 3 Majority consent of partners is needed to admit a new partner.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 6BCRQ

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When a partnership dissolves, the last step in the dissolution process is to ________. A. allocate the gain or loss on sale based on income sharing ratio B. pay off liabilities C. sell noncash assets D. divide the remaining cash among the partners
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 resources
When a partnership liquidates, do partners get paid first or do creditors get paid first?
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1) When the net assets of the partnership are fairly valued and the amount invested by the incoming partner is equal to the interest he acquires, then it is implied that there is a. bonus to old partners b. bonus to new partner c. no bonus to either new or old partners d. bonus to both new and old partners 2) When a partner withdraws from the business, a) a new partnership is automatically formed b) the original partnership continues c) a new partner is admitted to the partnership d) the partnership operations ceases 3) A partner who withdraws his interest at carrying amount receives assets a) above his capital interest b) less than his capital interest c) with an indeterminate value d) equal to his capital interest
Choose the response that correctly completes the following sentence about an individual partner's outside basis in a partnership. A partner's outside basis: A) Cannot be less than zero. B) Does not change as long as the partner maintains their partnership interest. C) Is used to apply the basis limitation to losses from a partnership. D) Must be tracked by the partnership. An S corporation shareholder may carry forward unallowed loss that exceeds the basis of their stock (increased by any loans the shareholder made to the corporation) for what period of time? A) A maximum of two years. B) A maximum of ten years. C) A maximum of twenty years. D) Indefinitely, until they are allowed to deduct the entire amount. The Form 1099-A, Acquisition or Abandonment of Secured Property, gives the taxpayer the information that they need to calculate: A) The amount that they will need to pay to avoid having to give up their property. B) Gain or loss from the sale of the property. C) Their ordinary…
Write TRUE if the statement is correct and FALSE if the statement is wrong. Write your answers on the space provided before the number. Erasures are strictly NOT allowed. 1. The loss absorption balances represent the maximum loss that the partners could absorb without reducing their equity below zero. 2. Gains and losses on the sale of assets in liquidation are divided equally among partners. 3. A partnership maybe dissolved without being liquidated but liquidation is always preceded by dissolution. 4. Under the installment method of partnership liquidation, realization of non-cash assets is accomplished over an extended period of time. When cash is available, creditors may be partially or fully paid. Any excess maybe distributed to the partners in accordance with a program of safe payments or a cash priority program. This process persists until all the non-cash assets are sold. 5. Restricted interest are provided for assumed non-sale of remaining non-cash assets and…
1. When the investment of a new partner is below the new partners' capital balance and goodwill is not recorded, who will receive the bonus: a.The new partner.b.The old partners in their old profit and loss ratio.c.The old partners in their new profit and loss ratio.d.The old and new partners in their new profit and loss ratio 2.S1: Admission of a new partner by investment generally increases the total assets and capital of the new partnership unless there is a negative asset revaluation.S2: Admission of a new partner by the purchase of interest will never affect the total assets and capital of the new partnershipa. S1 is false, S2 is true b. Both statements are true c. Both statements are false d. S1 is true, S2 is false 3. S1: In lumpsum liquidation, the remaining cash available after realization and payment of liquidation expenses, will always be equal to the total interest of the partners.S2: In installment liquidation, the partner who has the highest absorption capacity shall be…
choose the response that correctly the following sentence about an individual partner's outside basis in a partnership. a partner's outside basis? (a) can be less than zero, (b) does not change as long as the partner maintains their partnership interest, (c) is used to apply the basis limitation to losses from a partnership, (d) must be tracked by the partnership.
Answer if TRUE or FALSE. If the statement is FALSE provide at least a brief explanation why it's wrong. 1. Liquidation expenses which are incurred in the realization of non-cash assets affect cash but not partners' capital. 2. A partnership is generally liquidated when its term is terminated. 3. The outside creditors of the partnership have better claims over the personal assets of the partner. 4. Gains and losses arising from the sale of the assets in a partnership liquidation are always divided equally among partners.
2. Which of the following is incorrect on why a particular partner may have a deficit balance during a partnership liquidation? I. The partner with the deficit may have the greatest profit and loss residual ratio II. The partner with the deficit may have made the greatest withdrawals from the partnership III. The partner with the deficit may have the smallest profit and loss residual ratio {A}. I only {B}. II only {C}. III only {D}. I and II only 3. When making a distribution to partners during a partnership liquidation, the partner who should receive the last allocation of the distribution is the one who has which of the following? [A] The largest capital account balance [B] The largest loss absorption power [C] The smallest capital account balance [D] The smallest loss absorption power
1. S1: In a partnership, at least one partner is required to be a/an limited partner in order to ensure partnership creditors will be paid and protectedS2: Unpaid liabilities should be included in computing for the total loss attributed to the partners. * Both statements are false S1 True; S2 False S2 True; S1 False Both statements are true 2. [S1] Forming a partnership requires two or more people agreeing to be partners contributing all their personal properties. [S2] Oral agreements of partners are not allowed. * Statement 2 is true. Both statements are true. Both statements are false. Statement 1 is true.