In the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. Question 27 options: True False
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- 3 When the investment of a new partner into the partnership exceeds his/her initial capital credit, there is: Group of answer choices Bonus from the new partner to the old partners Cannot be determined based on the given Partnership revaluation Bonus from the old partners to the new partnerQUESTION 1 Which one of the following alternatives is correct? A. The retirement of a partner from a partnership does not require the calculation of a new profit-sharing ratio but a simple reallocation of a retired partner's share. B. From the legal perspective, the activities of a dissolved and a subsequent new partnership are not separately accounted for and reported on. C. Since partnerships are not governed by a law requiring that IFRS be applied, it is not possible to introduce a standardised accounting procedure according to which changes in the ownership structure of partnerships ought to be recorded. D. Since a partnership is a legal entity, the ownership of a partnership is vested in the partners, and not in the partnership. E. When a change in the ownership structure of a partnership occurs, a new partnership agreement is entered into by the new partners which causes the existing partnership to continue with its business operations without any interruptions.Statement I: When a Partnership's operations resulted to a net loss, a partner who contributed legal services, shall have share of loss in accordance to the losses agreement. However, if there is no losses agreement, he shall not be liable to any loss.Statement II: All withdrawals and investments shall be considered when computing for the weighted average capital balance. Group of answer choices S1 is true; S2 is false Both statements are true S1 is false; S2 is true Both statements are false
- 3. If the proceeds from the sale of non – cash assets is less than the book value of the non – cash assets sold, this will Group of answer choices Decrease both the partnership assets and partners’ equity Increase the partnership assets but decrease the partners’ equity Decrease the partnership assets but increase the partners’ equity Increase both the partnership assets and the partners’ equity8 Which of the following ratio helps the partners to determine the amount of compensation to be paid by the new partner to the old partners for the share of profit surrendered? a. Sacrificing Ratio b. New Profit Sharing Ratio c. Gaining Ratio d. None of the options are correct1. When there is a capital deficiency, the effect is that Group of answer choices The liabilities and the partners’ equity will also decrease The cash and other assets will also be deficient The partners’ equity will increase There is no effect on the assets and liabilities 2. Which of the following procedures is not necessary in effecting a dissolution? Group of answer choices Recognizing undistributed profit or loss share of the partners at dissolution date. Closing the partnership books. Revaluing partnership assets. Revising the partners’ equity.
- Statement I: The estimated deficiency to unsecured claims represents the amount unrecoverable by the creditors. Statement II: In the case of corporate liquidation, historical cost is a material valuation for assets. O Both statements are correct O Both statements are incorrect O Only Statement I is correct O Only Statement I| is correct27 Statement I: When a partner sells an interest to a new partner at an amount that exceeds the carrying amount of the equity sold, the difference is recognized as a personal gain of the selling partner from the transaction. Statement II: The amount of net assets invested of a new partner into an existing partnership is not always equal to the amount credited to his capital account. O True, true Faise, false Fase, true O True falseS1: If the partners did not agree as to how profits are to be divided, then such should be divided among partners equally. S2: Interest based on partner’s capital are always provided. a. both statements are true b. both statements are false c. only S1 is true d. only S1 is false.
- 49 When a partner retires from the partnership and is given more cash than his adjusted capital, how should the difference be treated? Group of answer choices The difference should be credited to all remaining partners based on their remaining profit or loss ratio The difference should be debited to all remaining partners based on their remaining profit or loss ratio The difference should be accounted for as an additional partnership expense None of the above1. S1: Admission of a new partner by investment generally increases the total assets and capital of the new partnership unless there is a negative asset revaluation.S2: Admission of a new partner by the purchase of interest will never affect the total assets and capital of the new partnershipa. S1 is false, S2 is trueb. Both statements are truec. Both statements are false d. S1 is true, S2 is false1. S1: The dissolution of a partnership occurs only when the partnership is terminating operations and going out of business.S2: Bonus paid to a new partner result in a reduction to the capital accounts of the existing partners in proportion to their capital ratio. a. S1 is false, S2 is trueb. Both statements are truec. Both statements are false d. S1 is true, S2 is false
