Acctg 32 - Accounting for Special Transactions

Name: ________________________
Class: ___________________ Date: __________

Short Exam 02: Partnership Operations

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____ 1. Each partner has a separate capital and withdrawal account.

a. True b. False

____ 2. The chart of accounts for a partnership, with the exception of drawing and capital accounts, does not differ
from the chart of accounts for a sole proprietorship.
a. True b. False

____ 3. One reason that distributions of income and loss are prepared is to obtain the information to record a closing
entry.
a. True b. False

____ 4. If nothing is stated, partnership income is divided at the end of the period in proportion to the individual
partner's current capital balance.
a. True b. False

____ 5. The salary allocation to partners used in dividing net income normally appears as salary expense on the
partnership income statement.
a. True b. False

____ 6. The articles of partnership provide for:

> annual salary allowances of P36,000 and P18,000 to X and Y respectively.
> residual sharing equally between X and Y.
If the net income is P30,000: then X's share of net income is P20,000.
a. True b. False

____ 7. If the net income of a partnership is less than the total of the allowances provided by the partnership
agreement, the remainder must be divided among the partners in the profit/loss ratio.
a. True b. False

____ 8. The amount that a partner withdraws as a monthly salary allowance does not affect the division of net
income.
a. True b. False

____ 9. Anna devotes full time and Bea devotes one-half time to their partnership. If the partnership agreement is
silent concerning the division of net income of P30,000, Anna will receive a P20,000 share.
a. True b. False

____ 10. In the distribution of income, the net income is less than the salary and interest allowances granted; the
remaining balance will be a negative amount that must be divided among the partners as though it were a
loss.
a. True b. False

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Short Exam 02: Partnership Operations

Answer Section

MULTIPLE CHOICE

1. ANS: A PTS: 1
2. ANS: A PTS: 1
3. ANS: A PTS: 1
4. ANS: B PTS: 1
5. ANS: B PTS: 1
6. ANS: B PTS: 1
7. ANS: A PTS: 1
8. ANS: A PTS: 1
9. ANS: B PTS: 1
10. ANS: A PTS: 1