FINAL EXAM ACC 105 Questions with Correct
Answers
A partnership generally must adopt the same tax year as its majority
partners Correct Answer-T
A partnership reports its income on a Form 1040 Correct Answer-F
Guaranteed payments made by a partnership must be made to
individuals other than partners in the partnership. Correct Answer-F
A partnership must separately report Section 1231 gains and losses
rather than including them in ordinary taxable income. Correct Answer-
T
Income from a partnership is taxed to the partner only if the partner
receives the income as a distribution during the year. Correct Answer-F
The basis of a partner's interest in a partnership is increased by losses of
the partnership allocated to the partner. Correct Answer-F
Losses are disallowed for transactions between a partnership and a
partner who has a 50 percent interest in the partnership. Correct Answer-
F
, Partnership losses that are not used because a partner's basis in the
partnership interest is zero may not be carried forward and are lost by
the partner. Correct Answer-F
Partnership income is taxed at the same tax rates as the income of
corporations. Correct Answer-F
Because a partnership does not pay taxes, a partnership is not recognized
as a legal entity under civil law. Correct Answer-F
In general, income is recognized by the partner when a partnership
interest is received in exchange for services rendered to the partnership.
Correct Answer-T
The holding period of property contributed to a partnership includes the
period of time that the contributor has held the property. Correct
Answer-T
A partnership may not show a loss as a result of deducting guaranteed
payments made to the partners. Correct Answer-F
A partnership tax year will close if the partnership ceases to carry on any
business activity. Correct Answer-T
The tax year of a partnership generally closes upon entry of a new
partner. Correct Answer-F
Answers
A partnership generally must adopt the same tax year as its majority
partners Correct Answer-T
A partnership reports its income on a Form 1040 Correct Answer-F
Guaranteed payments made by a partnership must be made to
individuals other than partners in the partnership. Correct Answer-F
A partnership must separately report Section 1231 gains and losses
rather than including them in ordinary taxable income. Correct Answer-
T
Income from a partnership is taxed to the partner only if the partner
receives the income as a distribution during the year. Correct Answer-F
The basis of a partner's interest in a partnership is increased by losses of
the partnership allocated to the partner. Correct Answer-F
Losses are disallowed for transactions between a partnership and a
partner who has a 50 percent interest in the partnership. Correct Answer-
F
, Partnership losses that are not used because a partner's basis in the
partnership interest is zero may not be carried forward and are lost by
the partner. Correct Answer-F
Partnership income is taxed at the same tax rates as the income of
corporations. Correct Answer-F
Because a partnership does not pay taxes, a partnership is not recognized
as a legal entity under civil law. Correct Answer-F
In general, income is recognized by the partner when a partnership
interest is received in exchange for services rendered to the partnership.
Correct Answer-T
The holding period of property contributed to a partnership includes the
period of time that the contributor has held the property. Correct
Answer-T
A partnership may not show a loss as a result of deducting guaranteed
payments made to the partners. Correct Answer-F
A partnership tax year will close if the partnership ceases to carry on any
business activity. Correct Answer-T
The tax year of a partnership generally closes upon entry of a new
partner. Correct Answer-F
