VERSION: B

$(10$ marks$)$

Q$1.$ Multiple Choice Questions:

How are withdrawals by partners treated in the partnership accounting records?

a$)$ As an expense

b$)$ As a reduction in the partner's capital account

c$)$ As additional capital

d$)$ As income

Which of the following is a contingent liability?

a$)$ Accounts Payable

b$)$ Accrued Expenses

c$)$ Warranty Liability

d$)$ Prepaid Expenses

How are short$-$term notes payable different from accounts payable?

a$)$ Short$-$term notes payable are interest$-$free.

b$)$ Accounts payable are usually paid in installments.

c$)$ Short$-$term notes payable involve written agreements.

d$)$ Accounts payable have a longer maturity period.

In a limited partnership, who is typically responsible for the management of the business?

a$)$ General partners

b$)$ Limited partners

c$)$ Both general and limited partners

d$)$ Corporate partners

How are partnership profits and losses allocated in the absence of a specific agreement?

a$)$ Equally among partners

b$)$ Based on the partnership's years in operation

c$)$ Proportionate to each partner's capital balance

d$)$ According to the partner who invested the most capital