MODULE 1

C.

A partner who takes active part in the business but whose connections with the partnership is concealed to the public is known as A. Nominal partner B. Ostensible partner C. Secret partner D. Silent partner

A.

A partnership is formed by two individuals who were previously sole proprietors. Non-cash assets invested would be recorded into the partnership at proprietor's A. Fair value of the property at the date of investment B. Carrying amount of the property at the date of investment C. Carrying amount or fair value of the property at the date of the investment, whichever is higher D. Carrying amount or fair value of the property at the date of the investment, whichever is lower

B.

A partnership may be dissolved at any time by action of the partners and operation of law A. Mutual agency B. Limited life C. Legal entity D. Unlimited liability

D.

A partnership which has failed to comply with one or more of the legal requirements for its establishment is classified as A. Open partnership B. Close partnership C. De jure partnership D. De facto partnership

A.

A partnership which in reality is not a partnership but is considered as one only in relation to those who, by their conduct or omission are precluded to deny the partnership existence A. Partnership by estoppel B. De facto partnership C. De jure partnership D. Limited partnership

A.

All of the following affect a partner's capital account EXCEPT A. Payment of liability B. Partnership income or loss C. Additional Investment D. Withdrawal of a partner

A.

All partners are considered agents of the partnership A. Mutual agency B. Limited life C. Legal entity D. Unlimited liability

B.

One who does not take active part in the management of the business and whose connection in the partnership is concealed or unknown to the public A. Secret partner B. Dormant partner C. Limited partner D. Nominal partner

D.

One whose liability to third persons extends to his separate or private property A. Ostensible partner B. Capitalist partner C. Silent partner D. General partner

False

T/F A newly organized partnership should open a new set of books

False

T/F A partner's contribution in the form of industry or service is recorded by debiting the account "Industry".

True

T/F A partnership is much easier and less expensive to organize than a corporation

False

T/F A public instrument or partnership contract should always be prepared regardless of the amount or nature of the contribution

True

T/F Co-ownership or co-possession does not itself establish a partnership

False

T/F Contra accounts, like Allowance for Bad Debts and Accumulated Depreciation, on non-cash asset invested by partners are always carried on the partnership books

True

T/F Each partner generally has the authority to enter into contracts which are binding upon the partnership

True

T/F If a partner dies, the partnership is dissolved

True

T/F In a partnership, there should be as many capital accounts and drawing accounts as there are partners

True

T/F Mutual agency means that any partner may act as an agent of the partnership in conducting its affairs

True

T/F Net asset adjustment are made on sole proprietor's books, when these are to be used as partnership books, for the purpose of arriving at agreed values

True

T/F Partners are personally liable for the liabilities of the partnership is the partnership is unable to pay

True

T/F The property invested in a partnership by a partner becomes the property of the partnership

D.

The underlying assumption which suggests the continuation of an accounting entity in the absence of evidence to the contrary is... A. Accounting entity B. Consistency C. Substance over form D. Going concern

D.

When a partner withdraws cash or other assets, the drawing account is.... A. Credited B. Debited and Credited C. Not affected D. Debited

B.

When a partnership cannot pay its debts with business assets, the partners A. Have limited personal liability B. Must use their personal assets to meet the debts C. Must convert the partnership to a joint venture D. Are not personally liable for the debts

C.

When a partnership cannot pay its debts with business assets, the partners A. Must convert the partnership to a joint venture B. Have limited personal liability C. Must use their personal assets to meet the debts D. Are not personally liable for the debts

A.

Which accounting concept is violated when a sole proprietor uses the same bank account for his business and personal affairs A. Entity concept B. Accounting period C. Going concern D. Cost principle

A.

Which of the following accounting concept is violated when estimated future earnings are reported in the current financial reports? A. Prudence B. Entity concept C. Going concern D. Periodicity

A.

Which of the following accounting concept is violated when the bookkeeper included last year's revenue as revenue of current year? A. Periodicity B. Objectivity C. Prudence D. Going concern

B.

Which of the following accounting concept is violated when the company acquired a refillable pen amounting to P50 and depreciated it because it is estimated to be used for five year? A. Periodicity B. Materiality C. Going concern D. Objectivity

A.

Which of the following are kinds of partnership according to liability of partners? A. General and Limited Partnership B. Limited Partnership C. Industrial Partnership D. General Partnersip