Question

Exercises Journalize entry for formation of a partnership (LO 2), AP EH-1 Gary Ellis has owned and operated a proprietorship for several years. On January 1, he decides to terminate this business and become a partner in the firm of Marin and Ellis. Ellis's investment in the partnership consists of $15,000 in cash, and the follow- ing assets of the proprietorship: accounts receivable $14,000 less allowance for doubtful accounts of $2,000, and equipment $20,000 less accumulated depreciation of $4,000. It is agreed that the allowance for doubtful accounts should be $3,000 for the partnership. The fair value of the equipment is $17,500.

Answer 1

The correct answer is d

Focusing on a company as a whole & reporting on the same is a characteristic of Financial Accounting. Managerial reports are prepared for the particular sub units where it wholly focuses on the performance history of that particular unit & forecasts reports on the same. Therefore, Managerial Accounting does not focuses on company as a whole.