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Accounting Multiple Choice Questions

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Question;1. Callie was admitted to the Adams & Beal Partnership four years ago. The partnership has a deficiency at year end for the current year. How could this deficiency be accounted for?;-Use the profit and loss ratios to absorb the deficiency;-Do not account for the loss in the year incurred, it can be offset against income in future years;-Do not account for the loss in the year incurred, it could be offset against income in future years or carried back to offset income in prior years;-Losses are not passed on to individual partners in a partnership;2. The following is the priority sequence in which liquidation proceeds will be distributed for a partnership;-partnership drawings, partnership liabilities, partnership loans, partnership capital balances;-partnership liabilities, partnership loans, partnership capital balances;-partnership liabilities, partnership loans, partnership drawings, partnership capital balances;-partnership liabilities, partnership capital balances, partnership loans;3. Which of the following statements is correct regarding a partner's debit capital balances?;-The partner should make contributions to reduce the debit balance to whatever extent possible;-If contributions are not possible, the other partners with credit capital balances will be allocated a portion of the debit balance based on their proportionate profit-and-loss-sharing percentages;-Partners who absorb another's debit capital balance have a legal claim against the deficient partner;-All of these statements are correct;4. In a lump-sum liquidation of a partnership;-all assets are paid to the partners based on their initial contribution, with the oldest partnering being paid back first;-all assets are paid to the partners based on an equal distribution regardless of when the partner was admitted to the partnership;-all assets must be realized before any distribution can be made;-all assets are paid to the partners, at the same time, based the fair market value at the time they were initial donated to the partnership;5. When a partner withdraws from a partnership and the remaining partners acquire that interest;-this may have an effect on the liquidity of the partnership;-this will increases the cash flow into the partnership;-this will always create goodwill for an amount equal to the withdrawing partner?s original interest in the partnership;-this will cause all assets to be written down to offset the acquisition cost of the withdrawing partner?s interest at the time of the withdraw;6. The parent?s entry to record the interest in the foreign subsidiary?s undistributed income would be;-a debit to the investment of the subsidiary and a credit to subsidiary income;-a debit to the investment of the subsidiary receivable and a credit to subsidiary income payable;-a debit to the investment of the subsidiary receivable and a credit to subsidiary income payable;-a debit to the investment of the subsidiary receivable and a credit to subsidiary income payable;-no entry since the income is undistributed;7. You are the controller of A company that has just recently merged with B company. You are doing some research and based on your old accounting textbooks from 1999 you are thinking about using the pooling method for this transaction. This method;-requires assets only to be recorded at historical costs and liabilities at fair value;-requires all assets to be recorded at historical cost;-requires all assets and liabilities to be recorded at fair value;-is no longer an acceptable method;8. For financial accounting purposes, assets of an individual partner contributed to a partnership are recorded by the partnership at;-historical cost;-book value;-fair market value;-lower of cost or market;9. Which of the following would be least likely to be used as a means of allocating profits among partners who are active in the management of the partnership?;-Salaries;-Bonus as a percentage of net income before the bonus;-Bonus as a percentage of sales in excess of a targeted amount;-Interest on average capital balances;10. Assuming that the functional currency of a foreign subsidiary is not the local currency, which of the following accounts would be re measured at the historical rate?;-Accounts Payable;-Long-term notes payable;-Land;-Sales Revenue

 

Paper#44289 | Written in 18-Jul-2015

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