Multiple Choice Questions 1. In a partnership, mutual agency means that a. One partner is designated as

Question:

Multiple Choice Questions
1. In a mutual agency means that
a. One partner is designated as agent, to act for all partners.
b. Any partner may act on behalf of the Partners have unlimited liability for debts.
d. Partners are co-owners of property.
2. In computing the net income of a expenses include operating expenses and
a. Partners' loan interest and partners' salaries.
b. Partners' loan interest but not partners' salaries.
c. Partners' salaries but not partners' loan interest.
d. No items related to partners.
Use the following information to answer questions 3 and 4 below.
Two individuals form a Amos invests $75,000 and Bemus invests $25,000, but each is to have an equal interest in capital.
3. Under the bonus method, capital credited to Amos would be
a. $75,000.
b. $50,000.
c. $37,500.
d. $25,000.
4. net income for the year is $140,000. Adam's share of net income is
a. $14,000.
b. $12,000.
c. $42,000.
d. $ 4,000.
5. net income for the year is $40,000. Adam's share of net income is
a. $ 0.
b. $(18,000).
c. $ 42,000.
d. $(12,000).
Use the following information to answer questions 7-12 below.
The of the Troy at September 30, 2013 shows:

Consider each question independently.
6. Renee decides to retire as a partner. The remaining partners agree to pay Renee $300,000 from partnership funds, and to use the bonus method. The capital accounts of the remaining partners after Renee's retirement are
a. Thomas $ 160,000, Oscar $80,000, Yvonne $40,000.
b. Thomas $60,000, Oscar $(20,000), Yvonne $(60,000).
c. Thomas $100,000, Oscar $20,000, Yvonne $(20,000).
d. Thomas $90,000, Oscar $10,000, Yvonne $0.
7. Renee decides to retire as a partner. The remaining partners agree to pay Renee $300,000 from partnership funds, and to use the partial goodwill method. The capital accounts of the remaining partners after Renee's retirement are
a. Thomas $160,000, Oscar $80,000, Yvonne $40,000.
b. Thomas $400,000, Oscar $320,000, Yvonne $280,000.
c. Thomas $260,000, Oscar $180,000, Yvonne $140,000.
d. Thomas $220,000, Oscar $140,000, Yvonne $100,000?

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