1Unearned revenues are liabilities......... 2.Obligations not due within one yea

Question

1Unearned revenues are liabilities......... 2.Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.......... 3.In the absence of a partnership agreement, the law says that income of a partnership will be shared equally by the partners.......... 4.A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events............ 5.A note payable can be used to extend the payment due on an account payable............... 6.Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.............. 7.A liability does not exist if there is any uncertainty about whom to pay, when to pay, or how much to pay............... 8. When the current value of a partnership is greater than the recorded amounts of equity, the current partners usually require any new partner to pay a bonus for the privilege of joining............. 9.A single liability can be divided between current and noncurrent liabilities.............. 10.The withdrawals account of each partner is closed to retained earnings at the end of the accounting period............... 11.A partnership has an unlimited life................ 12.The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.............. 13.A potential lawsuit claim is recorded when the claim can be reasonably estimated and it is reasonably possible............... 14.A contingent liability is a potential obligation that depends on a future event arising from a future transaction or event............... 15. If the partners agree on a formula to share income and say nothing about losses, then the losses are shared equally.............. 16.The amount of federal income tax withheld depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee............... 17.Partner return on equity can be used by each partner to help decide whether additional investment or withdrawal of resources is best for that partner............... 18.Limited liability partnerships are designed to protect innocent partners from malpractice or negligence claims resulting from the acts of another partner............... 19.Partners can invest both assets and liabilities into a partnership............... 20.Employers must keep certain payroll records, including individual earnings reports for each employee............... 21. Accounting procedures for all items are the same for both C corporations and S corporations in all aspects............... 22. Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business............... 23.Salary allowances are reported as salaries expense on a partnership income statement............... 24.The times interest earned ratio is calculated by dividing income before interest expense and income taxes by interest expense............... 25.Employers must pay FICA taxes equal in amount to the FICA taxes withheld from their employees............... 26.When a partner leaves a partnership, the present partnership ends............... 27.A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle, whichever is longer............... 28.In a limited partnership the general partner has unlimited liability............... 29.Debt guarantees are not usually disclosed as a contingent liability............... 30.The matching principle requires that interest expense not be accrued on a note payable until the note is paid, even if the end of an accounting period occurs between the signing of a note payable and its maturity date............... 31. Sales taxes payable is credited and cash is debited when companies send sales taxes collected from customers to the government............... 32.A lawsuit is an example of a contingent liability for the defendant............... 33. To buy into an existing partnership, the new partner must contribute cash to the partnership............... 34. Required payroll deductions result from laws and include income taxes, Social Security taxes, pension and health contributions, union dues, and charitable giving...............35. The equity section of the balance sheet of a partnership can report the separate capital account balances of each partner...............36. Assets invested by a partner into a partnership remain the property of the individual partner...............37. Partners' withdrawals are credited to their separate withdrawals accounts...............38. A partnership is an unincorporated association of two or more people to pursue a business for profit as co-owners...............39. Partners in a partnership are taxed on the amounts they withdraw from the partnership, not the partnership income...............40. When partners invest in a partnership, their capital accounts are credited for the amount invested...............

Explanation / Answer

1. T 2. F 3. T 4. F 5. f 6. F 7. F 8. F 9.T 10.T 11.T 12.T 13.T 14.F 15.F 16.T 17.F 18.F 19.T 20.T 21.F 22.F 23.T 24.F 25.T 26.F 27.T 28.T 29.F 30.F 31.F 32.T 33.F 34.T 35.T 36.F 37.T 38.F 39.F 40.T

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