Acct_122_Midterm_2010-03[1]

Acct_122_Midterm_2010-03[1] - 1....

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1.  When a partnership is liquidated: A) Noncash assets are converted to cash. B) Any gain or loss on liquidation is allocated to the partners' capital accounts using the income and loss  sharing ratio. C) Liabilities are paid or settled. D) Any remaining cash is distributed to the partners based on their capital balances. E) All of these. Feedback:  correct Points Earned:  2.0/2.0  Correct Answer(s): 2.  A partnership agreement: A) Is not binding unless it is in writing. B) Is the same as a limited liability partnership. C) Is binding even if it is not in writing. Feedback:  correct D) Does not generally address the issue of the rights and duties of the partners. E) Is also called the articles of incorporation. Points Earned:  2.0/2.0  Correct Answer(s): 3.  When a partner is added to a partnership: A) The previous partnership ends. Feedback:  correct B) The underlying business operations end. C) The underlying business operations must close and then re-open. D) The partnership must continue. E) The partnership equity always increases.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Points Earned:  2.0/2.0  Correct Answer(s): 4.  Renee Jackson is a partner in Sports Promoters. Her beginning partnership capital balance for the current year  is $55,000, and her ending partnership capital balance for the current year is $62,000. Her share of this year's  partnership income was $5,250. What is her partner return on equity? A) 8.47% B) 8.97% C) 9.54% D) 1047% E) 1060% Feedback:  $5,250/[($55,000 + $62,000)/2] = 8.97% Points Earned:  2.0/2.0  Correct Answer(s): 5.  Which of the following statements is  generally  correct?  I. A limited partner in a limited partnership has the right to take part in the management of the partnership. II. A limited partner is subject to personal liability for the limited partnership's debts. A) I only B) II only C) Neither I nor II Feedback:  correct D) Both I and II E) Impossible to answer without knowing the state in which the partnership was formed. Points Earned:  2.0/2.0  Correct Answer(s): 6. 
Background image of page 2
In a partnership agreement, if the partners agreed to an interest allowance of 10% annually on each partner's  investment, the interest allowance: A) Is ignored when earnings are not sufficient to pay interest. Feedback:  incorrect B) Can make up for unequal capital contributions. C) Is an expense of the business. D) Must be paid because the partnership contract has unlimited life. E) Legally becomes a liability of the general partner.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 21

Acct_122_Midterm_2010-03[1] - 1....

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online