Description
Not all partnerships have multiple capital accounts, but some do.
True or false
A partnership with $8 million in debt and $5 million in equity would have $3 million in assets.
True or false
A partnership with $5 million in equity and $7 million in assets would have $2 million in liabilities.
True or false
After studying chapter 12, it’s safe to say that GAAP requires newly formed partnerships to record the value of their assets at cost.
True or false
After studying chapter 12, it’s logical to conclude that the IRS requires partnerships to report but not pay tax on earned income.
True or false
According to our text, large accounting firms, like KPMG for example, were originally organized as partnerships.
True or false
Individual partners, not partnerships, pay income tax.
True or false
Partners can not lose more than their investment in the firm.
True or false
After studying chapter 12, it’s logical to conclude that some but not all partnerships get federal tax refunds from the IRS.
True or false
Given a tax rate of X% and income of $Y, partnership Z would owe the IRS X%($Y) in federal taxes.
true or false
If partners X, Y, and Z share profit in a 3:2:1 ratio respectively and the partnership earned $M in net income, X would report $M/2 (net income divided by 2) in taxable partnership income on her federal tax return.
True or false
If partners X, Y, and Z share profit in a 3:3:2 ratio respectively, together, partners X and Y would earn 75% of total partnership income combined.
True or false
Cash should be debited for $60,000 in part (a) of exercise 12-9 on page 620.
True or false
Gilbert capital would be credited for $64,000 in part (a) of exercise 12-10.
True or false
After joining the firm in exercise 12-11, Gorman would have $57,700 in partnership equity.
True or false
In part (c) of exercise 12-3, McDonald would earn $4,600 as a return on her investment
True or false
Analysis of Exhibit 2 on page 597 indicates that the purchase of interest method was used in exercise 12-10 to record the admission of Clarke.
True or false
Analysis of exhibit 2 indicates that the total dollar value of partnership assets did not change in exercise 12-10 after Gilbert joined the firm.
True or false
Analysis of exhibit 2 indicates that the dollar value of total partnership assets in exercise 12-10 did not change after Clarke joined the firm.
True or false
The correct answer to part (c) of exercise 12-18 is “equally”.
True or false
After paying off creditors, Oliver and Ansari should divide any left over cash remaining in exercise 12-19 equally.
True or false
After paying off creditors, Oliver and Ansari should divide any left over cash remaining in exercise 12-19 equally.
true or false
After analyzing Exibit 3 on page 636, it’s logical to conclude that corporations tend to locate their headquarters in the same state they incorporate in.
True or false
After studying chapter 13, it’s logical to conclude that only the earnings of corporations that pay dividends are subject to double taxation.
True or false
Most large businesses are organized as corporations.
True or false
After studying chapter 13, it’s logical to conclude that many small businesses tend to be unincorporated.
True or false
The capital section of a corporation’s balance sheet is called stockholders’ equity.
True or false
A corporation with $12 million in stockholders’ equity and $40 million in assets would be $28 million in debt.
True or false
If a corporation sold 1 million shares of its $24 par value common stock for $36 a share it would earned $36 million in revenue and a $12 million profit.
True or false
A shorter name for “paid in capital in excess of par” is “premium”.
True or false
Recording the entry for the sale of treasury stock at a price above par would require a credit to the premium on treasury stock account.
True or false
Stock cannot be authorized, issued, and outstanding all at the same time.
True or false
Some but not all corporations are owned entirely by stockholders.
True or false
After studying chapter 13, it’s logical to conclude that corporations report retained earnings on their balance sheets as part of stockholders’ equity.
True or false
Corporations report retained earnings as revenue on their income statements.
True or false
Corporations report retained earnings as capital on their balance sheets.
True or false
No journal entry is required to record a stock split.
True or false
No journal entry is required to record a stock dividend.
True or false
Dividends are closed to retained earnings at year end.
True or false
Corporations report treasury stock as an asset on their balance sheets.
True or false
When compared to Exhibit 1 on page 592, analysis of Exhibit 2 on page 635 shows that corporations and partnerships have more similarities than differences.
True or false
