When a partner's capital balance becomes a deficit, O The deficit will be considered as a partnership loss O The partner with a deficit balance should contribute additional assets to offset the deficit balance O The other partners should file a case against the partner with the deficit O The deficit will be absorbed the richest partner

When a partner's capital balance becomes a deficit, O The deficit will be considered as a partnership loss O The partner with a deficit balance should contribute additional assets to offset the deficit balance O The other partners should file a case against the partner with the deficit O The deficit will be absorbed the richest partner

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 1BD

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A partner's withdrawal of assets from a LLP that is considered a permanent reduction in that partner's equity is debited to the partner's: Select one :- a. Retained Earnings account b. Loan Receivable account c. Drawing account d. Capital account
The partner's drawing account is used: O To reduce the partner's capital account balances at the end of an accounting period O To record the partner's share of net income or loss for an accounting period O In the same manner as the partner's loan accounts O To record the partner's salaries.
In which order are partnership assets distributed to the partners? O Capital balances, loans, profits O Loans, profits, capital balances O Profits, capital balances, loans Loans, capital balances, profits
Accounting In the liquidation of a partnership, a loan from a partner a. Will be paid off at the same time as payment of other liabilities of the partnership b. Will be paid off before distribution of cash to partners for their capital investments c. Will be closed to the partner's drawing account d. Will be written off
When a partner invests noncash assets in a partnership, the assets should be recorded at their O book value. carrying value. O fair market value. O original cost.
When a partner invests noncash assets in a partnership, the assets should be recorded at their: a) Book value. b) Market value c) Carrying value. d) Original cost.
In the absence of Partnership deed, specify the rules relating to the following :(i) Sharing of profits and losses.(ii) Interest on partner’s capital.(iii) Interest on Partner’s drawings.(iv) Interest on Partner’s loan(v) Salary to a partner.
Mar From a partner's viewpoint, which of the following will have an unfavourable effect PF on the closing balance of the current account of a partner? Opening debit balance in the current account i) Interest on drawings i) Salaries iv) Drawings O A. I), ii), i) and iv) O B. i), ii) and iv) OC. i) and iv) only O D. i), ii) and iv)
A new partner's agreed capital is the O amount credited to the new partner O bonus given to the new partner O share of the new partner in the amount of asset revaluation recognized amount contributed by the new partner
Which of the following is considered a "constructive receipt" of grss income? * a. A partner's share in the income of the general professional partnership is credited to his capital account. b. Payment for the sale is deposited by buyer to the seller's bank account. c. Cancellation of debt of employee by employer in consideration of friendship. d. A and B only O e. All of the above
In accounting for a withdrawal by payment from partnership assets, which statement is FALSE? O The withdrawing partner may be paid using non-cash assets. O Net assets will decrease O Total capital will decrease. O Asset revaluations should bx recorded.
In case of admission of a partner, the first adjustment that need to be prepared is?? A. Bank account B. Profit and loss account adjustment C. The revaluation of assets D. Realization of income or loss S1: In a partnership, at least one partner is required to be a/an limited partner in order to ensure partnership creditors will be paid and protected S2: Unpaid liabilities should be included in computing for the total loss attributed to the partners. * A. Both statements are true B. s1 True; S2 False C. S2 True; S1 False D. Both statements are false S1: Joint Control is present if tow ore more parties have greater than 50% Control.S2: One Party has more than 50% in a joint arrangement * A. Both statements are false B. Both statements are true C. S2 True; S1 False D. s1 True; S2 False S1: If the total contributed capital of THE partnership is greater than the total agreed capital, it is possible that a goodwill be recognized or an undervaluation of asset occurred.S2: Noncash…