Generally, industrial partners share in the losses sustained by a partnership. O True False
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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 resourcesWhen a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income sharing ratio. Why?When a partnership liquidates, do partners get paid first or do creditors get paid first?
- 1. Why do you think an industrial partner does not share in the losses of partnership? 2. When the profit and loss agreement provides for the allowance of interest on partner's equity and salaries to partners, why are the partners entitled to these allowances even if the partnership operations results in a loss?In the liquidation of general partnership, which of the following claims shall be settled first by the liquidating partner? a. Capital contribution by the managing partner b. Advances made by capitalist partner to the partnership c. Share in profit by the industrial partner d. Employee benefits of workersIn a partnership liquidation, a gain from sale of assets is credited to the A. partner with the lowest capital balance B. partners based on profit-loss sharing ratio C. partners based on their capital balances D. partnership liabilities
- is it true or false? Explain Unless stated otherwise,in the partnership contract,profits and losses are shared among the partners in the ratio of their capital equity balances.Partner’s interest in a partnership is generally equal to: a)The fair value of net assets at date of contribution. b)The sum of the fair values of the assets the partner contributes to the firm, increased by any liabilities of other partners assumed and decreased by any personal liabilities that are assumed by other partners. c)The sum of the bases of the individual assets the partner contributes to the firm decreased by the partner’s share of partnership liabilities. d)The unamortized cost of the assets to the partner.When the profit and loss agreement provides for the allowance of interest on partner's equity and salaries to partners, why are the partners entitled to these allowances even if the partnership operations results in a loss?
- In which of the following type of partnership, partners risk only their investment in the business and are not subject to the same liabilities, as long as they do not participate in the management and control of the enterprise a. General Partnership b. Limited Partnership c. All of the above d. S Partnership Clear my choiceWhich of the following will decrease the capital balance of a partner? A. Share in partnership profit. B. Receipt of share in revaluation surplus from a partnership property, plant and equipment. C. Drawing made by a partner. D. Advances made by partner to the partnership.16 In the absence of agreement as to distribution of loss, how shall the partnership loss be distributed to the partners? Group of answer choices a. The industrial partner shall be exempted from partnership loss because it shall be distributed to the capitalist partners only in accordance with profit agreement ratio. b. The industrial partner shall be exempted from partnership loss while the capitalist partners shall be distributed on the basis on capital contribution ratio. c. The loss shall be distributed equally to all partners including the industrial partner. d. The industrial partner shall be exempted from the partnership loss while the capitalist partners shall share equally.