Chapter14_Quiz_AA Hamlen 052610

Chapter14_Quiz_AA Hamlen 052610 - Chapter 14 Advanced...

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Chapter 14– Advanced Accounting, 1 st edition by Hamlen, Huefner and Largay Practice Quiz 1. Topic: Limited liability partnerships LO 1 Which statement below is false concerning the characteristics of limited liability partnerships (LLPs) and limited liability companies (LLCs)? a. LLPs and LLCs both limit the amount of liability to a partner or investor’s investment. b. LLCs allow investors to avoid personal liability for supervision of a wrongful act, but personal liability still exists for LLP partners. c. Virtually all the large CPA firms are LLPs. d. For both LLPs and LLCs, no income tax is levied on the LLP/LLC itself. 2. Topic: Partnership accounting issues LO 1 A partner’s capital account consists of: a. Total investment of capital plus (minus) total allocations for the partner’s share of partnership income (loss), less total withdrawals b. Total investment of capital c. Total investment of capital plus (minus) total allocations for the partner’s share of partnership income (loss) d. Total investment of capital less total withdrawals Use the following information to answer questions 3 and 4: Rao and Ramesh form a partnership. Rao contributes property with a fair value of $500,000, subject to a mortgage of $100,000, which the partnership assumes. Ramesh contributes $200,000 in cash plus property with a fair value of $50,000.
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Chapter14_Quiz_AA Hamlen 052610 - Chapter 14 Advanced...

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