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Partnership Accounting Quiz

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Questions and Answers

When a partner invests an asset other than cash, what happens to the partner's capital account?

It is credited for the market value of the asset (correct)

It is debited for the market value of the asset

It is closed

It remains unchanged

In a partnership, if a partner invests cash, what happens to the Cash account of the partnership?

It is debited (correct)

It is credited

It is closed

It remains unchanged

What type of accounts are maintained for each partner in a partnership?

Common capital and revenue accounts

Separate capital and drawing accounts (correct)

Joint capital and expense accounts

Combined capital and profit accounts

What type of enterprises is a partnership popular among?

<p>Personal service enterprises</p> Signup and view all the answers

If a certain amount of money is owed for an asset invested by a partner, what may the partnership do?

<p>Record the owed amount as a liability</p> Signup and view all the answers

Study Notes

Partnership Accounting

When a partner invests an asset other than cash, the partner's capital account is increased by the fair market value of the asset.
When a partner invests cash, the Cash account of the partnership is increased by the amount of cash invested.
Separate capital accounts are maintained for each partner in a partnership to track their individual investments and shares of profits and losses.
Partnerships are popular among small and medium-sized enterprises, such as family businesses, professional services, and start-ups.
If a partner invests an asset and an amount of money is owed for that asset, the partnership may assume the liability and record it as an expense.

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Description

Test your knowledge of partnership accounting with this quiz. Learn about the important features and accounting procedures for partnerships, including initial investments, profit sharing, and financial reporting. Ideal for individuals studying business, finance, or accounting.