Accounting II Exam 1

Front

A partnership in which all partners have mutual agency and unlimited liability is called:

Back

General Partnership

Front

The withdrawal account of each partner is:

Back

Closed to that partner's capital account

Front

Which of the following statements is true?

• Partners are employees of the partnership.
• Salaries to partners are expenses on the partnership income statement.
• Salary allowances are expenses.
• Salary allowances usually reflect the relative value of services provided by partners.

Back

Salary allowances usually reflect the relative value of services provided by partners.

Front

A capital deficiency means that:

Back

A partner has a debit balance in their capital account

Front

A partnership that has general and limited partners, where the limited partners have no personal liability beyond the amounts they invest in the partnership is a:

Back

Limited partnership

Front

What does partnership accounting NOT do?

Back

Tax the business entity

Front

Which of the following is NOT a way in which a partner can withdraw from a partnership?

• Closing the business and liquidating its assets under the mutual agency principle
• Selling his/her interest to another person for cash
• Receiving cash from the partnership in the amount of his/her interest
• Receiving assets from the partnership in the amount of his/her interest

Back

Closing the business and liquidating its assets under the mutual agency principle

Front

Partners' withdrawal of assets are:

Back

Debited to withdrawals account

Front

When a partnership is liquidated, what happens?

Back

Liabilities are paid or settled

Front

When a partner is unable to pay a capital deficiency, what happens?

Back

The deficiency is absorbed by the remaining partners.