Chapter 3 flashcards

Question 1

CAPITAL ACCOUNT
permanent withdrawals without prejudice to partnership creditors
- retireement and or selling of interest in the partnership
- Idstribution of loss incurred by the partnership

Answer 1

Debit

Question 2

An additional section called distribution of net income and net loss is included

Answer 2

Statement of P and L

Question 3

A statement that reports changes that have taken place in the partners equity during the priod

Answer 3

Statement of changes in partners equity

Question 4

Shows the details of selected accounts presentwed in the Statement of P and L

Answer 4

notes to financial statement

Question 5

provide salaries to give recognition to the ability, experience or time devoted by a partner in the business.

Answer 5

services rendered

Question 6

provide interest to give recognition to differences in the capital contribution given in proportion to the period such capital was actually used

Answer 6

capital investment

Question 7

provides bonus which is an incentive or special compensation which is usually based on net income.

Answer 7

entreprenurial ability

Question 8

the ___ shall receive a share in profit as what is just and equitable

Answer 8

industrial partner

Question 9

Capital Account
-distribution of profits
- initial and or additional investments in the form of cash merchandise or other assets

Answer 9

Credit

Question 10

Drawing account
-Temporary withdrawals which are deducted to the share in partnership profits
closing of credit balance due to retirement

Answer 10

Debit

Question 11

Drawing account
- allowance for salaires and bonuses which are part of the share in the profit or loss of the partnership.