1. What are the main advantages of proprietorships?

2. What are the main advantages of partnerships?

3. What are the main advantages of limited liability companies?

4. What are the disadvantages of proprietorships?

5. What are the disadvantages of partnerships?

6. What are the disadvantages of limited liability companies?

7. In forming a partnership, how are the investments of each partner recorded?

8. Are noncash assets recorded at values agreed upon by the partners or their book values? Explain.

9. Is the accounting for an LLC the same as a partnership? How does it differ?

10. Emilio Alvarez and Graciela Zavala joined together to form a partnership. Is it possible for them to lose a greater amount than the amount of their investment in the partnership? Explain.

11. What are the major features of a partnership agreement for a partnership?

12. What are the major features of an operating agreement for a limited liability company?

13. If there is no specification or agreement regarding division of income or losses, how are they divided among partners?

14. Partners seldom contribute time and resources equally. What are some methods to divide partnership income to address this?

15. Josiah Barlow, Patty DuMont, and Owen Maholic are contemplating the formation of a partnership. According to the partnership agreement, Barlow is to invest $60,000 and devote one-half time, DuMont is to invest $40,000 and devote three-fourths time, and Maholic is to make no investment and devote full time. Would Maholic be correct in assuming that since he is not contributing any assets to the firm, he is risking nothing? Explain.

16. During the current year, Marsha Engles withdrew $4,000 monthly from the partnership of Engles and Cox Water Management Consultants. Is it possible that her share of partnership net income for the current year might be more or less than $48,000? Explain.

17. What accounts are debited and credited to record a partner's cash withdrawal in lieu of salary?

18. The articles of partnership provide for a salary allowance of $6,000 per month to partner C. If C withdrew only $4,000 per month, would this affect the division of the partnership net income? Explain.

19. At the end of the fiscal year, what accounts are debited and credited to record the division of net income among partners.

20. What are the two closing entries partnerships make at the end of the accounting period?

21. If the net income is less than the total allowances, how is the remaining net income divided?

22. What are the steps in liquidating a partnership?

23. Explain a capital deficiency.

24. What does a statement of partnership equity include?

25. How do you calculate revenue per employee?

Answer rating: 100% (QA)

1 Proprietorships offer simplicity in management and decisionmaking with the owner having full control over the business 2 Partnerships provide shared decisionmaking and potential for increased resour... View the full answer