财务会计英语练习及答案ch13
CHAPTER 13 ACCOUNTING FOR PARTNERSHIPS AND LIMITED LIABILITY CORPORATIONS
Chapter 13—Accounting for Partnerships and Limited Liability Corporations TRUE/FALSE
1. There are only four legal structures to form and operate a business.
ANS: F DIF: 1 OBJ: 01
2. In a general partnership, each partner is individually liable to creditors for debts
incurred by the partnership, to the extent of the partner's capital balance.
ANS: F DIF: 1 OBJ: 01
3. A partnership is a legal entity separate from its owners.
ANS: F DIF: 1 OBJ: 01
4. A partnership is subject to federal income taxes.
ANS: F DIF: 1 OBJ: 01
5. A disadvantage of partnerships is the mutual agency of all partners.
ANS: T DIF: 1 OBJ: 01
6. Each partnership must have a written partnership agreement.
ANS: T DIF: 1 OBJ: 01
7. Each partner may withdraw the assets he or she contributed to the partnership at any
time.
ANS: F DIF: 2 OBJ: 01
8. When compared to a corporation, one of the major disadvantages of the partnership is
its limited life.
ANS: T DIF: 1 OBJ: 01
9. When compared to a corporation, one of the major advantages of a partnership is its
ease of formation.
ANS: T DIF: 1 OBJ: 01
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10. Under a Subchapter S Corporation, the IRS allows income to pass through the
corporation to the individual stockholders without the corporation having to pay taxes on the income.
ANS: T DIF: 2 OBJ: 01
11. A Limited Liability Corporation is a business entity form that combines the
advantages of the corporation and the partnership forms.
ANS: T DIF: 1 OBJ: 01
12. For tax purposes, a Limited Liability Corporation may elect to be treated as a
partnership.
ANS: T DIF: 1 OBJ: 01
13. The Limited Liability Corporation may elect to be manager managed rather than
member managed which means that only authorized members may legally bind the corporation.
ANS: T DIF: 1 OBJ: 01
14. Each partner has a separate capital and withdrawal account.
ANS: T DIF: 1 OBJ: 02
15. The chart of accounts for a partnership, with the exception of drawing and capital
accounts, does not differ from the chart of accounts for a sole proprietorship.
ANS: T DIF: 1 OBJ: 02
16. When there are significant changes in stockholders equity, generally, a retained
earnings statement is not sufficient, requiring a statement of stockholders' equity to be prepared.
ANS: T DIF: 1 OBJ: 02
17. The equity reporting for a Limited Liability Corporation is similar to that of a
partnership but the changes in capital are shown on a statement of members' equity.
ANS: T DIF: 1 OBJ: 02
18. When a partner invests noncash assets in a partnership, the assets are recorded at the
partner's book value.
ANS: F DIF: 2 OBJ: 03
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