1. a disadvantage of a partnership is:

a. the principle of mutual agency

b. pooling of resources

c. less government regulation

2.how is the allocation of partnership profits affected by drawings?

a. drawings only affect profit allocation if the partnership agreement provides for interest on drawings

b. drawings must be deducted from profits before they are allocated.

c. drawings must be added back to profits before they are allocated

3.when preparing the closing entries for a partnership at the end of the accounting period which of these statement is true? assume that capital account balances are not fixed.

a. income and expenses are closed to the capital accounts

b. the drawings account are close to the capital account

c. the profit and loss summary account is closed to the retained earnings accounts

4.which is an advantage of a partnership over a sole proprietorship

a. ease of transferring ownership.

b. pooling of resources

c. unlimited liability

d. mutual agency

5.as compared to a company with a similar number of shareholders as there are partners in the partnership, an advantage of a partnership is:

a. less government regulation

b. pooling of resources

c. unlimited liability

d. mutual agency

6.douglas and johnson each invested $50000 in a partnership where they agreed to share profits 60% douglas, 40% johnson. the partnership business was not successful and now has no assets. in addition they are being sued for $80000 by a supplier for non- payment of invoices. what is the maximum amount for which douglas could be held responsible if it lawsuit is successful?

a.$48000

b. $80000

c.0

d. $40000

7.the legislation with the most significant influence on the formation, operation and dissolution of partnership is the:

a. federal partnership act

b. partnership act

c. partnership formation, operation and liquidation rules

d. common partnership program

8.when assets are contributed to a partnership they should be recorded into the books of the new entity at:

a. tax value

b. fair value

c. book value

d. book value

cost minus accumulated depreciation

9.the partnership agreement of X and Y provides that interest at 55 per annum is to be charged on partners drawings. during year ended 31 December 2009 drawings by X were:

1 feb 2009 $2400

1 june 2009 $4800

1 aug 2009 $960

what is the total amount of interest on drawings chargeable to X's current account for the year?

a.$200

b. $100

c. $300

d. $270