1)A general partner in a partnership

(a) is liable for partnership liabilities only to the extent of that partner's capital equity.

(b )is always the general manager of the firm.

(c) is the partner who lacks a specialization.

(d) has unlimited liability for all partnership debts.

2) The partnership form of business is

(a) restricted to firms having fewer than 10 partners.

(b) restricted to law and medical practices.

(c)not restricted to any particular type of business.

(d)most often used in relatively large companies.

3) Which of the following is not a principal characteristic of the partnership form of business organization?

(a)Limited life

(b)Mutual agency

(c)Limited liability

(d) Association of individuals

4) Which of the following statements is true regarding the form of a legally binding partnership contract?

(a)The partnership contract may be implied.

(b)The partnership contract cannot be oral.

(c)The partnership contract must be in writing.

(d)The partnership contract may be based on a handshake.

5) Limited partnerships

(a)guarantee that a partner will get back his original investment.

(b)must have at least one general partner.

(c)guarantee that a partner will receive a return.

(d)are limited to only three partners.

(6) Which of the following statements about partnerships is incorrect?

(a)Partnership assets are co-owned by partners.

(b)If a partnership is terminated, the assets do not legally revert to the original contributor.

(c)each partner has a claim on assets equal to the balance in the partner's capital account.

(d)If the partnership agreement does not specify the manner in which net income is to be shared, it is distributed according to capital contributions.

6) A partner invests into a partnership a building with an original cost of $360,000 and accumulated depreciation of $160,000. This building has a $280,000 fair value. As a result of the investment, the partners capital account will be credited for

(a) $480,000.

(b)$360,000.

(c)$280,000.

(d)$200,000.

7) Brian and Sandy are forming a partnership. Brian will invest a truck with a book value of $10,000 and a fair value of $14,000. Sandy will invest a building with a book value of $30,000 and a fair value of $42,000 with a mortgage of $15,000. What amount should be recorded in Sandys capital account?

(a) $42,000

(b)$30,000

(c)$14,000

(d)$27,000

8) The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix, the managing partner, receives a salary allowance of $108,000, (b) each partner receives 15% interest on average capital investment, and (c) remaining net income or loss is divided equally. The average capital investments for the year were: Alix $600,000, Gise $1,200,000, and Bosco $1,800,000. If partnership net income is $540,000, the amount distributed to Alix should be

(a) $180,000.

(b) $90,000.

(c) $198,000.

(d) $162,000.

9) Mary Jessicas capital statement reveals that her drawings during the year were $50,000. She made an additional capital investment of $25,000 and her share of the net loss for the year was $10,000. Her ending capital balance was $200,000. What was Jessicas beginning capital balance?

(a) $185,000

(b)$235,000

(c)$260,000

(d) $225,000