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FAC1601 and FAC1602 ASSESSMENT 5 SEMESTER 2 2023
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- University Of South Africa (Unisa)
FAC1601 and FAC1602 ASSESSMENT 5 SEMESTER 2 2023
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10/29/23, 9:37 PM Assessment 5 (page 5 of 5)UNISA 2023 FAC1601-23-S2 Welcome Message Assessment 5
QUIZ
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Question 47
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Which one of the following alternatives is correct?
a. 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.
b. Since a partnership is a legal entity, the ownership of a partnership is vested in the partners, and not in the
partnership.
c. 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.
d. From the legal perspective, the activities of a dissolved and a subsequent new partnership are not separately
accounted for and reported on.
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.
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Question 48
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Which one of the following alternatives is correct?
a. The fair value of the assets of a partnership is equal to the total equity of a partnership.
b. To ensure that compliance is followed, the financial statements of partnerships must be prepared according to IFRS.
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. An existing goodwill account balance is transferred to the partners’ capital accounts on admission of a new partner.
e. The selling price of the partnership business is determined by the value of its assets.
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,10/29/23, 9:37 PM Assessment 5 (page 5 of 5)
Question 49
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Which one of the following alternatives is incorrect?
a. When recording the valuation adjustments, if the value of a liability is decreased, the valuation account credited with
the amount of a decrease.
b. The change in the ownership structure of the partnership is effectively the same as the dissolution.
c. To ensure that compliance is followed, the financial statements of partnerships must be prepared according to IFRS.
d. The selling price of the partnership business is determined by the value of its assets.
e. An existing goodwill account balance is transferred to the partners’ capital accounts on admission of a new partner.
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Question 50
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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. 1, 2, 3 and 5
b. 1, 3, 4 and 5
c. 1, 2, 3 and 4
d. All of the above
e. 1, 2, 4 and 5
f. 2, 3, 4 and 5
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,10/29/23, 9:37 PM Assessment 5 (page 5 of 5)
Question 51
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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 must allocated to the capital accounts of the
existing partners in their existing profit-sharing ratio.
b. 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.
c. 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.
d. 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.
e. 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.
f. 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.
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Question 52
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Which one of the following alternatives is correct regarding the liquidation of a partnership?
a. The liquidation of a partnership implies that the assets of the partnership must be converted into cash, the liabilities
must be settled, and the remaining cash must be paid to the partners to refund only their current accounts.
b. The liquidation of a partnership implies that the assets of the partnership must be converted into cash, the liabilities
must be added to the partner’s capital, debtors allocated to the partners according to their profit-sharing ratio, and
the remaining cash must be paid to the partners to refund their capital accounts.
c. The liquidation of a partnership implies that the assets of the partnership must be ceded to the creditors, the
liabilities must be added to the partner’s capital, and the available cash must be paid to the partners to refund their
capital accounts.
d. The sequestration of a partnership is regarded as a form of dissolution of insolvent partnerships and its form and
treatment is the same as the liquidation.
e. The liquidation of a partnership implies that the assets of the partnership must be converted into cash, the liabilities
must be added to the partner’s capital, and the remaining cash must be paid to the partners to refund their capital
accounts.
f. The liquidation of a partnership is regarded as a form of dissolution that results in the termination of the business
activities of solvent partnerships.
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, 10/29/23, 9:37 PM Assessment 5 (page 5 of 5)
Question 53
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Which one of the following alternatives is false?
a. With a simultaneous liquidation, the liquidation account (a profit or loss on liquidation) is transferred to the partners'
capital accounts in their profit-sharing ratio.
b. With a simultaneous liquidation, a single liquidation account is prepared.
c. In the case of a piecemeal liquidation, a liquidation account is prepared for each phase of the liquidation process.
d. A piecemeal liquidation allows a partnership to continue with activities.
e. A simultaneous liquidation allows a partnership to continue with activities until the liquidation of all the assets is
concluded.
f. A piecemeal liquidation will ensure that assets are realised at the best possible selling price.
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