These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below.

Date Taken: 3/13/2015Time Spent: 3 h , 25 min , 39 secs Points Received: 9 / 10  (90%)

Question Type: # Of Questions: # Correct:

Multiple Choice 10 9

Grade Details - All Questions

Question :

If A is the total capital of a partnership before the admission of a new partner, B is the total capital of the partnership after the admission of the new partner, C is the amount of the

 

new partner's investment, and D is the amount of capital credited to the new partner, then there is:

Student Answer: goodwill to the new partner if B > (A + C) and D < C.  

goodwill to the old partners if B = A + C and D > C.   a bonus to the new partner if

B = A + C and D > C.   neither bonus nor goodwill if B > (A + C) and D > C.

  Points Received: 1 of 1

  Comments:

Question :

The balance sheet given below is presented for the partnership of Janet, Anton

 

, and Millet:

 The partners share profits and losses in the ratio of 5:3:2, respectively. The partners agreed to dissolve the partnership after selling the other assets for $50,000. On dissolution of the partnership, Janet should receive:

Student Answer: $0.   $80,000.   $10,000.   $30,000.

  Points Received: 1 of 1

  Comments:

Question :

When a new partner is admitted into a partnership and the new partner receives a capital credit greater than the tangible assets contributed, which of the following explains the difference?I. The old partners'

 

goodwill is being recognized.II. The new partner's goodwill is being recognized.

Student Answer: I only   II only   Either I or II   Both I and II 

  Points Received: 1 of 1

  Comments:

Question :

A partner's tax basis in a partnership is comprised of which of the following items?I. The partner's tax basis of

 

assets contributed to the partnership.II. The amount of the partner's liabilities assumed by the other partners.III. The partner's share of other partners' liabilities assumed by the partnership.

Student Answer: I plus II minus III   I plus II plus III   I minus II plus III

I minus II minus III

  Points Received: 1 of 1

  Comments:

Question :

Which of the following items are important in the determination of safe installment payments to partners?I. Deficits created in capital accounts are distributed to the remaining partners.II. All unsold noncash assets are assumed to be worthless.

 

Student Answer: I only   II only   Both I and II   Neither I nor II

  Points Received: 0 of 1

  Comments:

Question :

A partnership is a(n):I. accounting entity.II. taxable entity.

 

Student Answer: I only   II only   Neither I nor II   Both I and II

  Points Received: 1 of 1

  Comments:

Question :

In the computation of a partner's Loss Absorption Power (LAP), which of the

 

following statements is incorrect?I. The computation of LAPs for all partners allows cash to be distributed before all partnership assets have been sold and all creditors have been paid.II. The computation of LAPs for all partners indicates the relative

strength of each partner's net capital position so that available cash is distributed in respective loss-sharing ratios.

Student Answer: I   II   Both I and II   Neither I nor II 

  Points Received: 1 of 1

  Comments:

Question :

A limited liability company (LLC):I. is governed by

 

the laws of the state in which it is formed.II. provides liability protection to its investors.III. does not offer pass-through taxation benefits of partnerships.

Student Answer: Both I and III.   III.   Both I and II.   I, II, and II. 

  Points Received: 1 of 1

  Comments:

Que

Partner A has a

 

stion :

smaller capital balance than Partner L. Partner A, however, has a higher profit-and-loss-sharing percentage than Partner L. The LA partnership has decided to liquidate. As a result of the information given,

Student Answer: Partner L will have a smaller loss absorption power than A.  

Partner L will receive cash only after A has received cash.   Partner A will have a

smaller loss absorption power than L.   Partner A will never receive any cash from partnership liquidation.

  Points Received: 1 of 1

  Comments:

Question :

Which of the following statements best describes accounting for a partnership?

 

Student Answer: A partnership may be a profit or a nonprofit entity.   A partnership may use federal income tax rules to account for transactions in their journals

and ledger accounts.   A partnership's equity section contains both capital and

retained earnings accounts.   A partnership may only distribute money through a dividend payment.

  Points Received: 1 of 1

  Comments:

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