Exam (elaborations)
Exam (elaborations) FAC 1601 (FAC1601) ABOUT FINANCIAL ACCOUNTING VOLUME 2 (8TH EDITION), ISBN: 9780639008677
- Course
- FAC 1601 (FAC1601)
- Institution
- University Of South Africa (Unisa)
FAC1601 assignment 02 semester 02
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9/11/22, 5:50 PM Assessment 2: Attempt reviewStarted on Sunday, 11 September 2022, 7:35 AM
State Finished
Completed on Sunday, 11 September 2022, 9:35 AM
Time taken 2 hours
Question 1
Complete
Marked out of 1.50
Which one of the following alternatives is correct?
a. Since a partnership is a legal entity, the ownership of a partnership is vested in the partners, and not in the partnership.
b. From the legal perspective, the activities of a dissolved and a subsequent new partnership are not separately accounted for and
reported on.
c. When a change in the ownership structure of a partnership occurs, a new partnership agreement is entered into by the new partners
which causes the existing partnership to continue with its business operations without any interruptions.
d. Since partnerships are not governed by a law requiring that IFRS be applied, it is not possible to introduce a standardised
accounting procedure according to which changes in the ownership structure of partnerships ought to be recorded.
e. The retirement of a partner from a partnership does not require the calculation of a new profit-sharing ratio but a simple reallocation
of a retired partner’s share.
Question 2
Complete
Marked out of 1.50
Which one of the following alternatives is correct?
a. An existing goodwill account balance is transferred to the partners’ capital accounts on admission of a new partner.
b. The fair value of the assets of a partnership is equal to the total equity of a partnership.
c. When recording the valuation adjustments, if the value of a liability is decreased, the valuation account credited with the amount of a
decrease.
d. To ensure that compliance is followed, the financial statements of partnerships must be prepared according to IFRS.
e. The selling price of the partnership business is determined by the value of its assets.
Question 3
Complete
Marked out of 1.50
Which one of the following alternatives is incorrect?
a. The selling price of the partnership business is determined by the value of its assets.
b. When recording the valuation adjustments, if the value of a liability is decreased, the valuation account credited with the amount of
a decrease.
c. The change in the ownership structure of the partnership is effectively the same as the dissolution.
d. To ensure that compliance is followed, the financial statements of partnerships must be prepared according to IFRS.
e. An existing goodwill account balance is transferred to the partners’ capital accounts on admission of a new partner.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=5495852&cmid=299793 1/7
, 9/11/22, 5:50 PM Assessment 2: Attempt review
Question 4
Complete
Marked out of 2.00
A change in the ownership structure of the partnership occurs:
1. When the partnership changes to operate in a completely new industry or market.
2. When a new partner is admitted to the partnership.
3. When one of the partners dies.
4. When one of the partners retires.
5. When a new profit-sharing ratio of the partnership is agreed upon and effected.
Which one of the following alternatives form part of the instances of a changes in the partnership ownership structure?
a. 2, 3, 4 and 5
b. 1, 2, 4 and 5
c. 1, 3, 4 and 5
d. 1, 2, 3 and 5
e. 1, 2, 3 and 4
f. All of the above
Question 5
Complete
Marked out of 1.50
Which one of the following alternatives is correct regarding the revaluation surplus in a partnership when there is a change in ownership?
a. The revaluation surplus forms part of the equity of the partners and will always be added to the current accounts of the existing
partners with a debit balance.
b. The revaluation surplus forms part of the equity of the partners and must allocated to the current accounts of the existing partners
in their existing profit-sharing ratio.
c. The revaluation surplus forms part of the equity of the partners and must allocated to the current accounts of the existing partners in
their new profit-sharing ratio.
d. The revaluation surplus forms part of the equity of the partners and must allocated to the capital accounts of the existing partners in
their existing profit-sharing ratio.
e. The revaluation surplus forms part of the liabilities of the partnership and must allocated to reduce the capital accounts of the
existing partners in their existing profit-sharing ratio.
f. The revaluation surplus forms part of the equity of the partners and must allocated to the capital accounts of the existing partners in
their new profit-sharing ratio.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=5495852&cmid=299793 2/7
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