Chapter 11 Accountancy

Question 1

Is an uncorporated association of two or more individuals to carry on, as co-owners, a business, with the intention of dividing the profits among themselves

Answer 1

Partnership

Question 2

Characteristics of a Partnership

Answer 2

• Ease of formation
• Separate legal pesonality
• Mutual agency
• Co-ownership of property
• Co-ownership of profits
• Limited Life
• Transfer of ownership
• Unlimited liability

Question 3

A contract of partnership is consensual. It is created by the agreement of the partners which may be constituted in any form, such as oral or written.

Answer 3

Formation

Question 4

is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date

Answer 4

Fair Value

Question 5

accounting for initial investments to the partnership

Answer 5

Formation

Question 6

division of profits or losses

Answer 6

Operations

Question 7

admission of a new partner and withdrawal, retirement or death of a partner

Answer 7

Dissolution

Question 8

winding-up of affairs

Answer 8

Liquidation

Question 9

Each partner’s ________ ________ is credited for the fair vlaue of his net contribution

Answer 9

capital account

Question 10

Partners’ ledger accounts

Answer 10

• Capital accounts
• Drawing accounts
• Receivable from/ Payable to a partner

Question 11

Each partner has his or her own _____ and ________ ______

Answer 11

capital and drawings account

Question 12

The partnership may enter into a loan transaction with a partner

Answer 12

Receivable from/ Payable to a partner