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ACCT 405 Week 7 Quiz Latest

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ACCT 405 Week 7 Quiz Latest

ACCT 405 Week 7 Quiz Latest

ACCT405

ACCT 405 Week 7 Quiz Latest

Question 1 (TCO 5)

The disadvantages of the partnership form of business organization, compared to corporations, include

  • the legal requirements for formation.
  • unlimited liability for the partners.
  • the requirement for the partnership to pay income taxes.
  • the extent of governmental regulation.
  • the complexity of operations.

Question 2 (TCO 2)

Which of the following is not a characteristic of a partnership?

  • The partnership itself pays no income taxes.
  • It is easy to form a partnership.
  • Any partner can be held personally liable for all debts of the business.
  • A partnership requires written articles of partnership.
  • Each partner has the power to obligate the partnership for liabilities.

Question 3 (TCO 5)

The partnership of Charley, Sammy, and Tommy was insolvent and will be unable to pay $30,000 in liabilities currently due. Which recourse was available to the partnership’s creditors?

  • They must present equal claims to the three partners as individuals.
  • They must try obtaining a payment from the partner with the largest capital account balance.
  • They cannot seek remuneration from the partners as individuals.
  • They may seek remuneration from any partner they choose.
  • They must present their claims to the three partners in the order of the partners’ capital account balances.

Question 4 (TCO 5)

The partnership contract for Hal and Jan LLP provides that Hal is to receive a bonus of 20% of net income and that the remaining net income is to be divided equally. If the partnership income before the bonus for the year is $57,600, Hal’s share of this prebonus income is

  • $28,800.
  • $33,600.
  • $34,560.
  • $43,200.
  • $57,600.

Question 5 (TCO 5)

Roger and Wolger formed a partnership in the Year 20×1. The partnership agreement provides for annual salary allowances of $55,000 for Roger and $45,000 for Wolger. The partners share profits equally and losses in a 60/40 ratio. The partnership had earnings of $80,000 for Year 20×2 before any allowance to partners. Which amount of these earnings should be credited to each partner’s capital account?

  • Roger Wolger $40,000 $40,000
  • Roger Wolger $43,000 $37,000
  • Roger Wolger $44,000 $36,000
  • Roger Wolger $45,000 $35,000