2) Partnership accounting does not: A) Allocate net loss to each partner according to the partnership agreement. B) Allocate net income to each partner according to the partnership agreement. C) Use a capital account for each partner. D) Tax the business entity. E) Use a withdrawals account for each partner.

3) Forman and Berry are forming a partnership. Forman will invest a building that currently is being used by another business owned by Forman. The building has a market value of $80,000. Also, the partnership will assume responsibility for a $20,000 note secured by a mortgage on that building. Berry will invest $50,000 cash. For the partnership, the amounts to be recorded for the building and for Forman's Capital account are: A) Building, $80,000 and Forman, Capital $80,000. B) Building, $60,000 and Forman, Capital $60,000. C) Building, $60,000 and Forman, Capital $80,000. D) Building, $60,000 and Forman, Capital $50,000. E) Building, $80,000 and Forman, Capital $60,000.

4) In the absence of a partnership agreement, the law says that income (and loss) should be allocated based on: A) The ratio of capital investments. B) Equal shares. C) A fractional basis. D) Salary allowances. E) Interest allowances.

5) Christie and Jergens formed a partnership with capital contributions of $300,000 and $400,000, respectively. Their partnership agreement calls for Christie to receive a $60,000 per year salary. Also, each partner is to receive an interest allowance equal to 10% of a partner's beginning capital investments. The remaining income or loss is to be divided equally. If the net income for the current year is $135,000, then Christie and Jergens's respective shares are: A) $90,000; $40,000. B) $57,857; $77,143. C) $35,000; $100,000. D) $67,500; $67,500. E) $92,500; $42,500.