Reference no: EM13347173
Question 1
Partners Ma, Running-Buck, and McFarlane own a hotel. McFarlane decides that the business has far fewer linens than it needs, so he makes a major linen purchase on open account. Which of the following terms refers to the fact that partners Ma and Running-Buck are just as liable for this purchase as McFarlane?
Answer
a. mutual agency
b. Unlimited liability
c. synergy
d.l iquidation
Question 2
The Williams & Wiley partnership has two partners and each partner has $50,000 invested in the firm. Woods is admitted to the partnership for one-third interest and invests $80,000. Woods's partnership account would be credited for:
Answer
a. $80,000.
b. $50,000.
c. $180,000.
d. $60,000.
Question 3
Which of the following statements best summarizes what a business partnership is all about?
Answer
a.A partnership involves two or more persons engaged in economic activity.
b.Partners need careful planning to succeed in business.
c.Partners own the partnership's assets together.
d. Partnerships can harness the skills and expertise of more than one person.
Question 4
Two partners agree to share profits in the following arrangement:
1) Salary of $40,000 for each
2) Interest at 10 percent on beginning capital balances
3) The remainder in a 50-50 ratio
The first partner contributed $100,000 in beginning capital, and the second contributed $50,000. How much money would the second partner receive from total profits of $120,000?
Answer
a.$45,000
b.$52,500
c.$12,500
d.$57,500
Question 5
If an incoming, new partner purchases an equity interest of $70,000 in a partnership and uses $90,000 in cash to do so, existing partners:
Answer
a.should give the new partner a one-third interest.
b.receive bonuses.
c.forfeit some capital to the new partner.
d.have overvalued the business's oldest assets.
Question 6
Which of the following types of business organization is more likely to enter into long-term contracts?
Answer
a.sole proprietorships
b.any of the above
c.corporations
d.partnerships
Question 7
When corporations account for their taxes, they estimate their taxes quarterly and accrue them for payment. In such a transaction, the account Income Tax Expense receives:
Answer
a.a footnote stating the details of the transaction.
b.none of the above.
c.a credit.
d.a debit.
Question 8
Stockholders expect to receive a certain amount of money in return for their investments in corporations. When they come in the form of cash, these returns are called:
Answer
a.cash dividends.
b.par values.
c.stock dividends.
d.issued shares.
Question 9
Accountants sometimes make mistakes in recording transactions. A prior period adjustment is shown on the:
Answer
a.statement of cash flows.
b.statement of retained earnings.
c.balance sheet.
d. income statement.
Question 10
The Ultimate Restaurant Corporation declares a stock dividend as well as its usual cash dividend of $.25 per share. For the stock dividend, existing stockholders will receive 10 percent of the amounts of stock they currently hold. If Joan currently has 1,000 shares of stock in this company, she will receive cash dividends and stock dividends worth a total of:
Answer
a.$100.
b.$250.
c.$275.
d.$210.
Question 11
Robert owns 50 shares of stock from a certain corporation. Each share is worth $3.00. After the corporation declares a two-for-one stock split, his shares are worth ________ each.
Answer
a.$150.00
b.$1.50
c.$3.00
d.$6.00
Question 12
The Aquatics Corporation issues only common stock. It has total stockholders' equity of $200,000 and 50,000 outstanding shares. The par value of each share is $3. The book value per share of stock is:
Answer
a. $16.
b. $4.
c. $150,000.
d. $3.
Question 13
Describe the ethics checklist and give an example in a hospitality situation on how it can be applied. (The Five P's of Ethical Power, they are purpose, pride, patience, persistence and perspective.)