Partnership Accounts
Accounts · 50 practice questions
Formation of a partnership; the profit or loss account; the appropriation account; partners' current and capital accounts; treatment of goodwill; admission/retirement of a partner; dissolution of a partnership; conversion of a partnership to a company.
- Understand the procedures for forming a partnership.
- Identify the accounts maintained for a partnership business.
- Determine the effects of admission and retirement of a partner and profit/loss on revaluation of assets.
- Determine partners' shares of profit or loss on dissolution.
Try a few questions
- Practice question 1
A new partner's capital contribution, upon joining an existing partnership, specifically may be paid either directly into the business or
- A.to an entirely unrelated, external third party, regardless of any agreement
- B.to the existing partners personally, depending on the agreement
- C.nowhere at all, since a new partner is never actually required to contribute capital
- D.a factor entirely unrelated to the existing partners receiving payment personally
Show the answer
B. to the existing partners personally, depending on the agreement
A new partner's capital contribution specifically may be paid either into the business or to the existing partners personally, depending on agreement.
- Practice question 2
Interest on partners' loans to the partnership specifically is charged as an expense before arriving at the partnership's net profit, unlike
- A.interest on capital
- B.interest on drawings, which is also charged as an expense before net profit
- C.partners' salaries, which are also charged as an expense before net profit
- D.a factor entirely unrelated to interest on capital of any kind
Show the answer
A. interest on capital
Interest on partners' loans specifically is charged as an expense before net profit, unlike interest on capital.
- Practice question 3
A minority partner, holding a smaller share in the partnership, specifically still has an equal right to
- A.a factor entirely unrelated to inspecting the partnership's own financial records
- B.veto any decision made by the other partners, regardless of their own smaller share
- C.inspect the partnership's own financial records, unless otherwise agreed
- D.receive an equal share of profit, regardless of any originally agreed ratio
Show the answer
C. inspect the partnership's own financial records, unless otherwise agreed
A minority partner specifically still has an equal right to inspect the partnership's financial records, unless otherwise agreed.
More UTME Accounts topics
- Nature and Significance of Bookkeeping and Accounting
- Principles of Double Entry
- Ethics in Accounting
- Cash Book
- Bank Transactions and Reconciliation Statements
- Final Accounts of a Sole Trader
- Stock Valuation
- Control Accounts and Self-Balancing Ledgers
- Incomplete Records and Single Entry
- Manufacturing Accounts
- Accounts of Not-For-Profit-Making Organizations
- Departmental Accounts
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