Question :
17.1 Learning Objective 17-1
1) Many associations such as medical centers : 1171094
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) Both B and C are correct.
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) Dissolution of a partnership can occur under the limited life characteristic if a partner:
A) dies.
B) becomes incapacitated.
C) goes bankrupt.
D) All of the above are correct.
5) The characteristic that means the actions of one partner are binding on all other partners is known as:
A) mutual agency.
B) exclusive agency.
C) unlimited life.
D) limited liability.
6) The characteristic that means if a partnership is unable to pay its obligations all general partners are individually liable is known as:
A) limited life.
B) unlimited liability.
C) limited liability.
D) mutual agreement.
7) A partner that is personally liable for all of the debts of the partnership is known as:
A) a limited partner.
B) a general partner.
C) a mutual partner.
D) None of these answers is correct.
8) Which of the following is true of a partnership?
A) Actions of one partner are not 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 $12,000, cash; Daniel invested $7,000 cash and equipment with a fair value of $5,000. The proper entry to record this is to:
A) debit Cash $19,000; debit Equipment $5,000; credit Capital $24,000.
B) debit Cash $19,000; debit Equipment $5,000; credit Accounts Payable $24,000.
C) debit Cash $19,000; debit Equipment $5,000; credit David’s Capital $12,000; and credit Daniel’s Capital $12,000.
D) debit Cash $19,000; credit David’s Capital $12,000; and credit Daniel’s Capital $7,000.
10) Tricia and Jennifer formed a partnership. Tricia invested $15,000 cash; Jennifer invested $8,000 cash, equipment with a fair value of $7,000, and $2,000 accounts payable. The proper entry to record this is:
A) debit Cash $23,000; debit Equipment 7,000; credit Accounts Payable $2,000; credit Tricia’s Capital $15,000; and credit Jennifer’s Capital $13,000.
B) debit Cash $23,000; debit Equipment 5,000; debit Accounts Payable $2,000; credit Tricia’s Capital $15,000; and credit Jennifer’s Capital $15,000.
C) debit Cash $23,000; debit Equipment $7,000; credit Tricia’s Capital $15,000; and credit Jennifer’s Capital $15,000.
D) debit Cash $21,000; debit Equipment $7,000; credit Tricia’s Capital $15,000; and credit Jennifer’s Capital $13,000.