41 which of the following statements is correct a if partners consider their cash wi 4302148

 

 

41. Which of the following statements is correct?

A. If partners consider their cash withdrawals to be compensation for the work they do for the partnership, the amounts of the withdrawals should be charged to Salaries Expense.

B. If there is no specific agreement on the division of partnership profits and losses, they are divided equally among the partners.

C. If a salary is allowed to one partner, other partners also must receive a salary allowance.

D. None of the above statements is correct.

 

42. The salary and interest allowances in a partnership profit-sharing agreement can best be described as

A. expenses of the business that are deducted from revenue in the determination of net income.

B. amounts on which each partner will not have to pay income tax.

C. a means of distributing net income in relation to the services provided and the capital invested by each partner.

D. a legal requirement in order for a partnership to be formed.

 

43. The entry to record the equal distribution of net income between two partners consists of a debit to

A. Income Summary and a credit to each partner's capital account.

B. each partner's capital account and a credit to Cash.

C. Income Summary and a credit to each partner's drawing account.

D. each partner's capital account and a credit to Income Summary.

 

44. The entry to record a partner's salary allowance consists of a debit to

A. the partner's capital account and a credit to Cash.

B. Salaries Expense and a credit to the partner's drawing account.

C. Income Summary and a credit to the partner's capital account.

D. Income Summary and a credit to the partner's drawing account.

 

45. Partnership net income of $33,000 is to be divided between two partners, Elan Chan and Roy Anderson, according to the following arrangement: There will be salary allowances of $20,000 for Chan and $10,000 for Anderson, with the remainder divided equally. How much of the net income will be distributed to Chan and Anderson, respectively?

A. $22,000 and $11,000

B. $21,500 and $11,500

C. $16,500 and $16,500

D. $21,000 and $12,000

 

46. Partnership net income of $75,000 is to be divided between two partners, Bob Garcia and Jerry McKernan, according to the following arrangement: There will be salary allowances of $30,000 for Garcia and $20,000 for McKernan, with the remainder divided equally. How much of the net income will be distributed to Garcia and McKernan, respectively?

A. $40,000 and $30,000

B. $42,500 and $32,500

C. $45,000 and $35,000

D. $67,500 and $57,500

 

47. Partnership net income of $66,000 is to be divided between two partners, Elan Julia Hood and Brian Duffy, according to the following arrangement: There will be salary allowances of $40,000 for Hood and $20,000 for Duffy, with the remainder divided equally. How much of the net income will be distributed to Chan and Anderson, respectively?

A. $33,000 and $33,000

B. $42,000 and $24,000

C. $43,000 and $23,000

D. $44,000 and $22,000

 

48. Partnership net income of $132,000 is to be divided between two partners, Jessie Folk and Jessica Stephens, according to the following arrangement: There will be salary allowances of $80,000 for Folk and $40,000 for Stephens, with the remainder divided equally. How much of the net income will be distributed to Folk and Stephens, respectively?

A. $88,000 and $44,000

B. $86,000 and $46,000

C. $84,000 and $48,000

D. $66,000 and $66,000

 

49. If no other method of dividing net income or net losses is specified in the partnership agreement, it is divided

A. in relation to the partners' capital account balances.

B. in relation to the amount of time each partner devotes to the business.

C. in relation to the original investment by each partner.

D. equally.

 

50. The partners' salary and interest allowances are recorded in

A. expense accounts.

B. drawing accounts.

C. capital accounts.

D. liability accounts.