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33 the assets which are contributed on formation

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33.The assets which are contributed on formation should equal to these book valuesif only book value don’tdiffer from fair value.34.At formation, accountants record accumulated depreciation on trucks.35.The entry to record the formation may include prepaid expenses among credit balances and accruedexpenses among debit balances.36.There are 3 ways to record the formation of partnerships.37.If a bonus method is used to record the initial formation of a new partnership, a bonus account shouldn’tappear.38.In the entry to record drawings of partners, cash is credited.39.If a partner presents a loan to the partnership, the loan appears as a debit.40.The interest on partner’s loan is an expense.41.The interest on partner’s capitalis an expense.42.The partnership is an accounting entity but is not a legal entity.43.Partnership take only one form which is general partnership.44.Limited partnerships include only limited partners.45.General partnership includes only general partners.46.Each general partner has the right or the authority to sign contracts on behalf of the partnership.47.The concept of "mutual agency" is the right which is not given to limited partners.48.At the initial formation of the new partnership of “Seleem Brothers”, “S.Seleem” had no economicresources, but his expected general performance was highly appreciated. To equalize initial capitals of allpartners including “S.Seleem”, the goodwill method should only be used at formation.49.At least two general entries should be made, if the goodwill method is used to equalize initial capitals ofall partners.50.If the bonus is to be used to equalize the initial capitals of all partners, then each partner's initial capital isthe result of dividing the number of all the partners by the total of their net investment.51.One single journal entry should be made if the bonus method is to be used to equalize initial capitals ofthe partners.52.One single journal entry can be prepared to record the formation of the new partnership, if all partnersagreed that each partner should receive an initial capital equals to the net assets he/she invested in thenew partnership.53.One single journal entry should be prepared to record the formation of the new partnership, if all partnersagreed that each partner should receive an initial capital equals to the net assets he/she invested in thenew partnership.54.The general partner "M.Sheeka" requested doubling his salary because of his effort contributed to the"Mixed Club" partnership. Although the partnership showed a record of continuous monthly losses, thisrequest was approved and the new salary was paid and properly recorded in books after altering thepartnership agreement.55.At the end of every fiscal year, the income summary account should be closed regardless of the orders orthe instructions given by the partners on how to deal with their shares in the net income.

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Term
Fall
Professor
NoProfessor
Tags
Corporation, Limited partnership, Types of business entity, partner

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