After closing the temporary owners' equity accounts into Income Summary, and after allocating the net income and closing the partners' drawing accounts, assume the partners' capital accounts had credit balances as follows: Peluso, $20,000; Odin, $30,000; Nazaro, $45,000 . Partners share profits and losses as follows: Peluso, 20%; Odin, 30%; and Nazaro, 50%. If Peluso purchased Nazaro's interest
in the partnership for $40,000 cash, the amount entered in Nazaro's capital account is a
a. $5,000 debit.
b. $40,000 debit.
c. $40,000 credit.
d. $45,000 debit.
d
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Which of the following pairs of accounts could not be included in the same adjusting entry?
a. Unearned Revenue and Revenue from Services b. Wages Expense and Wages Payable c. Interest Expense and Interest Receivable d. Rent Expense and Rent Payable
Under the Reasonably Foreseeable Users approach, ________.
A. the accountant could be liable to third parties who are unknown to the accountant B. a negligent accountant is exposed to lesser liability than in the Ultramares approach C. the accountant could only be liable to third parties who are specifically foreseeable users D. a negligent accountant is exposed to lesser liability than in the Restatement approach
What are the four principal concerns of investors?
What will be an ideal response?
All of the following statements regarding a work sheet are true except:
A. A worksheet aids in the preparation of financial statements. B. A worksheet is not useful in planning and organizing an audit of financial statements. C. A worksheet helps in preparing interim financial statements. D. A worksheet reduces possible errors when working with many accounts and adjustments. E. A worksheet shows the effects of proposed or "what-if" transactions.