Question

2. an unincorporation association of 2 or more persons to carry on a business for profit as co owners is a

a. proprietorship

b. partnership

c. voluntary organization

d, corporation

3. shelby and mortonson formed a partnership with capital contributors of $300,000 and $400000.respectively. their partnership agreement calls for shelby to receive a $60,000 per year salary. Also each partner is to receive an interest allowance equal to 10% of a partners beginnig capital investments. the remaining income or loss is to be divided equally. if the net income for the current year is $135,000 then shelby and mortonsons respective shares are

a. 67500; 67500

b. 57857; 77143

c. 92500; 42500

d. 35000; 100000

4. a decrease in the fair value of a security that has not yett been realized through an actual sale of the security is called a

a. contigent loss

b. unrealized loss

c. capitalized loss

d. realized loss

5. seamark buys $300,000 of Elders 8% 5 year bonds payable at par value. intrerest payments are made semiannually. all fo the following regarding accounting for the securities are true except

a. the debt securities should be recorded at the cost of $300,000

b. the securities will have a maturity valye of $300,000

c. the semiannual interest payment amount if $24000

d. interest revenue should be credited when an interest payment is received

6. richmans corporation has the following was formed on jan 1, the corporate charter provided for the 500,000 shares of $5 par value stock. the following transaction was engaged in by the corporation during the first month of operation. jan 5 the corporation issued 8,000 shares of common stock for cash of $25 per share. what should the amount credited to the paid in capital account on jan 5?

a.$160,000

b. $200,000

c. $240,000

d. $440,000

7. bonds owned by investors whose names and addresses are recorded by the issuing company and for which interest payments are made with checks or cash transfers to the bondholders; are caled

a. callable bonds

b. serial bonds

c. registered bonds

d. bearer bonds

8. groh and jackson are partners. Grohs capital balance in the partnership is $64,000 and jacksons capital balance is 61,000. groh and jackson have agreed to share equally in income or loss. groh and jackson agree to accept block with 20% interest. block will invest $35000 in the partnership. the bonus that is granted to groh and jackson equaly

a. $1875 each

b. $1500 each

c. $3750 each

d. 0 because groh and jackson actually grant a bonus to block

9. the following data were reported by a corporation

authorized shares 200,000

issued shares 120,000

treasury shares 10,000

the number of outstanding shares is

a. 120,000

b. 110,000

c. 130,000

d. 190,000

10. a company owns 9% bonds with a par value of $100,000 that pay interest on october 1 and april 1. the amount of interest accrued on december 31 (the companys year end would be)

a. $9000

b. $4500

c. $2250

d. $750

Answer 1

2. Correct Option is b- Partnership
In Propreitorship there is only one person involved.
Voluantry organisations are organisations formed for a specific purpose and are not always profit driven.
Corporation are incorporated
Hence only Partnership satisfies all the above mentione criteria.

3.

4. Decrease in fair value of security which has not been realised through actual sale of security is Unrealised Loss - option a
Contingent Loss is a loss that will happen only on happening of a certain event otherwise not.
Capitalised loss is a loss that has been capitalised.
Realised loss is a loss that has been realised through sale of security.
Hence the correct Option is B- Unrealised Loss

5. All are correct Except C-
Semi annual interest Payments will be $ 24,000. This is not correct as the question clearly mentions the 8% 5 year bond and Interest will be payable semiannually. 8% interest is per annum and the interest will be paid semi annually i.e 4 for 6 months and then 4 % for next six months. Semi annual interest payments will be $ 12,000.
Hence answer is option C