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Match the Items Below by Entering the Appropriate Code Letter

Question 171

Matching

Match the items below by entering the appropriate code letter.

Premises:
Total net assets and total capital of the partnership do not change.
Explains changes in individual partner's capital accounts during a period.
Results in an increase in total net assets and total capital of the partnership.
The basis for sharing profit and losses
Each partner is personally and individually liable for partnership debts.
The sale of noncash assets
Ends both the legal and economic life of the entity.
Written or verbal contract establishing duties and responsibilities of partners
Each partner can bind the partnership so long as the action appears to be appropriate for the partnership.
Capital account with a debit balance
Responses:
Mutual agency
Statement of Partners' Equity
Partnership liquidation
Purchase of an interest
Realization
Profit ratio
Admission by investment
Capital deficiency
Unlimited liability
Partnership agreement

Correct Answer:

Total net assets and total capital of the partnership do not change.
Explains changes in individual partner's capital accounts during a period.
Results in an increase in total net assets and total capital of the partnership.
The basis for sharing profit and losses
Each partner is personally and individually liable for partnership debts.
The sale of noncash assets
Ends both the legal and economic life of the entity.
Written or verbal contract establishing duties and responsibilities of partners
Each partner can bind the partnership so long as the action appears to be appropriate for the partnership.
Capital account with a debit balance
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