1.Partners Roger and Martin each have $3,000 capital balances and share income and losses in a 2:1 ratio for Roger and Martin, respectively. Cash equals $1,000, noncash assets total $10,000, and liabilities are $5,000. If all the noncash assets are sold for $4,000, Martin's capital account will:

A. increase by $4,667.

B. decrease by $2,000.

C. decrease by $1,000.

D. increase by $2,333.

2.When a partnership is terminated, the assets are turned into cash and obligations are paid. This process is called:

A. dissolution.

B. termination.

C. liquidation.

D. None of the above

3.Which of the following is an incorrect step in the process of partnership liquidation?

A. Pay any liabilities

B. Sell the assets

C. Allocate gains and losses to partners

D. None of the above

4.A partnership can be terminated by which of the following?

A. Bankruptcy

B. Death of a partner

C. Agreement by partners

D. All of the above

5.The sale of assets for liquidation purposes of a partnership is called:

A. a sheriff's sale.

B. dissolution.

C. net liquidation.

D. None of the above

6.Partners Ron and Sandra have $3,000 capital balances and share income and losses in a 2:1 ratio for Ron and Sandra, respectively. Cash equals $1,000, noncash assets are $10,000, and liabilities are $5,000. If all the noncash assets are sold for $5,500, and each partner agrees to make up any capital deficits with personal cash contributions, Sandra eventually will receive cash of:

A. $0.

B. $1,000.

C. $1,500.

D. $2,000.

7.The last entry to liquidate a partnership would probably include:

A. debit to Capital (for each partner); credit to Cash.

B. debit to Cash; debit or credit to Loss or Gain from Realization; credit to individual assets sold.

C. debit to individual assets sold; credit to Cash.

D. None of the above

8.Partners Eric and Jeremy each have $3,000 capital balances and share income and losses in a 2:1 ratio for Eric and Jeremy, respectively. Cash equals $1,000, noncash assets are $10,000, and liabilities are $5,000. If all the noncash assets are sold for $4,000, and each partner is personally insolvent, Jeremy eventually will receive cash of:

A. $0.

B. $1,000.

C. $1,500.

D. $2,000.

9.The last step taken in liquidating a partnership is to:

A. sell the assets.

B. divide profits on assets with partners.

C. pay creditors.

D. distribute the remaining cash according to partners' capital balances.

10.When a partnership is liquidated, the journal entry to pay the claims of creditors would include:

A. a debit to Cash.

B. a debit to each individual creditor.

C. a credit to cash.

D. Both B and C