Question

The Smith and Jones partnership agreement stipulates that profits and losses will be shared equally after salary allowances of $160,000 for Smith and $80,000 for Jones. At the beginning of the year, Smith's Capital account had a balance of $320,000, while Jones' Capital account had a balance of $280,000. Net income for the year was $200,000. The balance of Jones' Capital account at the end of the year after closing is:

Select one:

A. 380,000

B. 360,000

C. 340,000

D. 80,000

Mohamed 80%, Ahmed 15% and Ali 5% regular partnership is terminated. 200,000 $ of the partnership debt can be paid :

Select one:

A. 100% can be paid by Ali

B. only 50% can be paid by Ali

C. None of these

D. only 5% can be paid by Ali

the entry to record purchase of treasury stock includes:

Select one:

A. debiting treasury stock

B. crediting capital

C. debiting cash

D. crediting treasury stock

The individual assets invested by a partner in a partnership:

Select one:

A. revert back to that partner if the partnership liquidates

B. determine the scope of authority of that partner

C. determine that partner's share of net income or loss for the year

D. are jointly owned by all partners

The journal entry to accrue interest at the year end is:

Select one:

A. debit interest expenses and credit cash

B. debit interest expenses and credit interest payable

C. debit interest expenses and credit interest revenues

D. debit interest payable and credit cash

Retained earnings:

Select one:

A. reflects cash paid in by shareholders to date

B. is an optional account in the partnership form of business

C. is closed at the end of the year

D. is unique to the corporate form of business

Which of the following statements is not considered a disadvantage of the corporate form of organization?

Select one:

A. Separation of ownership and management

B. Limited liability of stockholders

C. Additional taxes

D. Government regulations

The entry for earned revenues previously unearned is:

Select one:

A. debit cash and credit unearned revenues

B. debit unearned revenues and credit service revenues

C. debit earned revenues and credit cash

D. debit service revenues and credit unearned revenues

When treasury stock is sold with a price above the cost, then:

Select one:

A. paid in capital is credited

B. liability is debited

C. treasury stock is debited

D. cash is credited

Ali has a machine with original value 10,000 acquired 2 years ago. The accumulated depreciation is 4000 and the book value is 6,000 and a fair value is 8000. The value to be recorded in new partnership is:

Select one:

A. 6,000

B. 8,000

C. 4000

D. 10,000

If total sales including tax are 95,200 and sales tax rate is 19%:

Select one:

A. total net sales 100,000

B. total net sales is 80,000

C. total net sales 95,200

D. total net sales is 70,000

Which of the following would not be recorded in the entry for the formation of a partnership?

Select one:

A. Accumulated depreciation

B. All of these would be recorded

C. Accounts receivable

D. Allowance for doubtful accounts

If Kiner Company issues 1,000 shares of $5 par value common stock for $70,000, the account:

Select one:

A. Cash will be debited for $65,000

B. Paid-in Capital in Excess of Par Value will be credited for $70,000

C. Common Stock will be credited for $5,000

D. Paid-in Capital in Excess of Par Value will be credited for $5,000

Answer 1

1.) The balance of Jones' Capital account at the end of the year after closing is: a) $380000

explanation: given, the net income will be equally shared by smith and jones.

so, net income for jones = 200000/2 =100000

jones had 280000 as balance in his capital account at the beginning.

therefore, balance of jone's capital account at the end of the year = 280000+100000 = 380000

2.) answer is only 5% can be paid by Ali.

explanation:

given, ali has only 5% share in the partership. so he is responsible for only 5% of the debt.

3.) the entry to record purchase of treasury stock includes:

A) debiting treasury stock

explanation: when a treasury stock is purchased, the journal entry is to debit treasury stock and credit cash for the purchase price.

4.) The individual assets invested by a partner in a partnership: D) are jointly owned by all parteners.

explanation: all partners have rights to assets in a partnership as per their profit sharing ratio and therefore the assets are jointly owned.

5.) The journal entry to accrue interest at the year end is:

B. debit interest expenses and credit interest payable.

explanation: To record the accrued interest over an accounting period, debit your Interest Expense account and credit your Accrued Interest Payable account.