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13 Cards in this Set

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  • Back
The statement of changes in partners' equity shows the beginning balance in retained earnings, plus investments, less withdrawals, the income or loss and the ending balance in retained earnings
FALSE
The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner.
TRUE
If partners devote their time and services to their partnership, their salaries are expenses on the income statement.
FALSE
If the partners agree on a formula to share income and say nothing about losses, then the losses are shared equally
FALSE
Assume that the S & B partnership agreement gave Steely 60% and Breck 40% of partnership income and losses. The partnership lost $27,000 in the current period. This implies that Steely's share of the loss equals $16,200, and Breck's share equals $10,800.
TRUE
In the absence of a partnership agreement, the law says that income of a partnership will be shared equally by the partners.
TRUE
When a partner leaves a partnership, the present partnership ends, but the business can still continue to operate.
TRUE
Assets invested by a partner into a partnership remain the property of the individual partner.
FALSE
Admitting a partner by accepting assets is a personal transaction between one or more current partners and the new partner.
FALSE
When the current value of a partnership is greater than the recorded amounts of equity, the current partners usually require any new partner to pay a bonus for the privilege of joining.
TRUE
When a partner leaves a partnership, the present partnership ends.
TRUE
To buy into an existing partnership, the new partner must contribute cash to the partnership
FALSE
When a partner leaves a partnership, the withdrawing partner is entitled to a bonus if the recorded equity is overstated.
FALSE