If the partnership agreement does not specify how income is to be allocated among the partners, profits should be allocated: a. In accordance with some pre-established ratio b. In proportion to the weighted average of capital invested during the period c. Equally d. Equitably so that the partners are compensated for the time and effort expended on behalf of the partnership
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- A well written partnership agreement should include each of the following except ________. A. how to settle disputes B. the name of the partnership C. division of responsibilities D. Partners individual tax rate1. S1: Partnership profits and losses (including bonuses and revaluations) are allocated in accordance with their Profit and Loss Ratio. S2: If only the share in the profits have been established in the articles of partnership, then the share in the losses must be in accordance with their profit ratio. a. S2 True; S1 False b. Both are false c. S1 True; S2 False d. Both are true 2. If the total contributed capital of the partnership is greater than the total agreed capital, which of the following may arise: a. Overvaluation of Assets b. All of the choices c. Undervaluation of Assets d. Goodwill7. The most equitable basis of distributing partnership profit by way of capital contributions is?A. beginning capitalB. ending capitalC. average capitalD. equally 8. In case the partnership makes profit, how will an industrial partner be given a share?A. what is just equitableB. equallyC. arbitrarilyD. proportion to capital contribution 9. Which of the following is not considered a legitimate expense of a partnership?A. Supplies used in the partnership’s officeB. Depreciation on assets contributed to the partnership by partnersC. Salaries for management hired to run the business D. Interest paid to partners based on their capital balances Kindly answer the questions correctly by choosing a letter and explain. Thank you.
- 4. How shall the profits and losses of the partnership be distributed among the partners? a. It should be divided equally. b. It should be divided according to their profits and losses sharing agreement. c. It should be divided proportionately in accordance with capital contribution. d. It should be divided according to what type of partner they are.8. In case the partnership makes profit, how will an industrial partner be given a share?A. what is just equitableB. equallyC. arbitrarilyD. proportion to capital contribution 9. Which of the following is not considered a legitimate expense of a partnership?A. Supplies used in the partnership’s officeB. Depreciation on assets contributed to the partnership by partnersC. Salaries for management hired to run the business D. Interest paid to partners based on their capital balancesS1: Partnership profits and losses (including bonuses and revaluations) are allocated in accordance with their Profit and Loss Ratio. S2: If only the share in the profits have been established in the articles of partnership, then the share in the losses must be in accordance with their profit ratio. a. Both are false b. S2 True; S1 False c. Both are true d. S1 True; S2 False
- If the total contributed capital of the partnership is greater than the total agreed capital, which of the following may arise: a.) Undervaluation of Assets b.) Goodwill c.) Overvaluation of Assets d.) All of the choicesWhich of the following transactions shall not affect the capital balance of a partner? A. Share of a partner in the partnership’s net loss. B. Receipt of bonus by a partner from another partner based on agreement. C. Advances made by the partnership to a partner. D. Additional investment by a partner to the partnership.If the total contributed capital of the partnership is greater than the total agreed capital, which of the following may arise: Undervaluation of Assets Goodwill Overvaluation of Assets All of the choices
- When the old partners receive a bonus upon admission of a new partner into apartnership, the bonus is allocated to:I All the partners in their profit and loss sharing ratio.II The existing partners in their profit and loss sharing ratio A. I only C. Either I or IIB. II only. D. Neither I nor IIS1: Partnership profits and losses (including bonuses and revaluations) are allocated in accordance with their Profit and Loss Ratio. S2: If only the share in the profits have been established in the articles of partnership, then the share in the losses must be in accordance with their profit ratio. Both are trueS2 True; S1 FalseBoth are falseS1 True; S2 FalseS1: Partnership profits and losses (including bonuses and revaluations) are allocated in accordance with their Profit and Loss Ratio. S2: If only the share in the profits have been established in the articles of partnership, then the share in the losses must be in accordance with their profit ratio. Both are false Both are true S1 True; S2 False S2 True; S1 False