Question : 17.1   Learning Objective 17-1 1) Many associations such as medical centers : 1177212

17.1   Learning Objective 17-1

1) Many associations such as medical centers and law firms could organize as a:

A) sole proprietorship.

B) corporation.

C) partnership.

D) All of the above.

2) The accounting procedures are the same for sole proprietorships as for partnerships with the exception of:

A) the asset section includes more than one cash account.

B) the liability section.

C) the revenue section.

D) the capital section is now divided per the number of partners.

3) Articles of partnership:

A) are required to form a partnership by federal law.

B) are a formal written agreement that states the partners’ relationship.

C) may be an oral agreement.

D) Both B and C are correct.

4) The partnership dissolves when a partner leaves. This characteristic is called:

A) mutual agency.

B) limited life.

C) limited liability.

D) unlimited life.

5) The actions of one partner are binding on all of the other partners. This characteristic is called:

A) mutual agency.

B) exclusive agency.

C) unlimited life.

D) limited liability.

6) When the obligations of a partnership cannot be met, each partner is liable for the obligation. This characteristic is called:

A) limited life.

B) unlimited liability.

C) limited liability.

D) mutual agreement.

7) A general partner is:

A) personally liable for all of the debts of the partnership.

B) liable for only the amount of his/her investment.

C) a partner that is liable for the amount of taxes paid each period.

D) None of these answers are correct.

8) Which of the following is true of a partnership?

A) Actions of one partner are binding on all the other partners.

B) Each partner is individually liable for partnership debts.

C) All of the owners always share income and losses equally.

D) Both A and B are correct.

9) David and Daniel formed a partnership. David invested $10,000, cash; Daniel invested $5,000 cash and equipment valued at $6,000. The proper entry to record this is to:

A) debit Cash $15,000; debit Equipment $6,000; credit Capital $21,000.

B) debit Cash $15,000; debit Equipment $6,000; credit Accounts Payable $21,000.

C) debit Cash $15,000; debit Equipment $6,000; credit David’s Capital $10,000; and credit Daniel’s Capital $10,000.

D) debit Cash $15,000; debit Equipment $6,000; credit David’s Capital $10,000; and credit Daniel’s Capital $11,000.

10) Tricia and Jennifer formed a partnership. Tricia invested $10,000 cash; Jennifer invested $5,000 cash, equipment valued at $6,000, and $1,000 accounts payable. The proper entry to record this is:

A) debit Cash 15,000; debit Equipment 6,000; credit Accounts Payable $1,000; credit Tricia’s Capital $10,000; and credit Jennifer’s Capital $10,000.

B) debit Cash 15,000; debit Equipment 6,000; debit Accounts Payable $1,000; credit Tricia’s Capital $10,000; and credit Jennifer’s Capital $10,000.

C) debit Cash $15,000; debit Equipment $6,000; credit Tricia’s Capital $10,000; and credit Jennifer’s Capital $10,000.

D) debit Cash $15,000; debit Equipment $6,000; credit Tricia’s Capital $10,000; and credit Jennifer’s Capital $11,000.