Reference no: EM133096704
Questions -
Q1. Lima and Hong are planning to form a partnership. Lima will invest P20,000 for a 20% interest in the new partnership. Hong will invest cash and his equipment with a fair market value of 50,000. They will share profits and losses equally.
How much cash Hong will invest?
a. P60,000
b. P30,000
c. P80,000
d. P50,000
Q2. Should the operations result to a loss, the provision for interest on partners' capital will not be honoured even if the agreement provided for such interest.
True
False
Q3. Ownership is easily transferred in a partnership.
True
False
Q4. Which of the following statements is FALSE?
a. A partner who allows his name to be included in the partnership name is deemed to be a general partner.
b. A person can be a partner although he has no capital.
c. All partners should share in the profit or losses.
d. A general partner has unlimited liability.
Q5. Jack Equipment 125,000 120,000
Jill Furniture and Fixtures 130,000 125,000
Jill Machinery 200,000 200,000
In addition, the partners invested cash of P60,000 and P40,000 for Jack and Jill, respectively. The machinery is subject to a mortgage of P30,000.
How much is the total capital of Jack?
a. P180,000
b. P185,000
c. P170,000
d. P 60,000
Q6. A partnership agreement may validly stipulate that one partner shall receive no share in profits or losses.
True
False
Q7. Lima and Hong are planning to form a partnership. Lima will invest P20,000 for a 20% interest in the new partnership. Hong will invest cash and his equipment with a fair market value of 50,000. They will share profits and losses equally.
How much is the total cash investment of the partners?
a. P80,000
b. P50,000
c. P70,000
d. P100,000
Q8. Unlimited liability holds a sole proprietor personally responsible for all the debts of the business.
True
False
Q9. Pedro paid Sarah P200,000 for her P 150,000 interest in a partnership. On the partnership books
a. Pedro will receive a bonus.
b. Pedro will have a capital balance of P200,000.
c. Pedro will give up a bonus.
d. Pedro will have a capital balance of P150,000.
Q10. Santiago invested P200,000 for a one-fourth interest in a partnership in which the other partners total capital of P400,000 before admitting Santiago. After distribution of the bonus, what is Santiago's capital balance?
a. P150,000
b. P100,000
c. P200,000
d. P50,000
Q11. Partnership profits and losses are divided among partners according to their sharing agreement. If no sharing agreement exists, profits or losses are divided equally.
True
False
Q12. Lima and Hong are planning to form a partnership. Lima will invest P20,000 for a 20% interest in the new partnership. Hong will invest cash and his equipment with a fair market value of 50,000. They will share profits and losses equally.
How much is the total partners capitalization?
a. P80,000
b. P50,000
c. P100,000
d. P70,000
Q13. A stipulation that excludes one or more partners from any share in the profits or losses is valid.
True
False
Q14. The salary, interest and stated ratio method of allocation cannot be applied when a loss has occurred.
True
False
Q15. A partner who invests assets into a partnership retains control over those specific assets.
True
False
Q16. Interest on loans from partners is recognized as partnership income.
True
False
Q17. A partnership may be established for charity.
True
False
Q18. A partnership with a capital of P3,000 or more is valid even if it is unregistered with the Securities and Exchange Commission.
True
False
Q19. In the absence of a specific agreement, the law requires the partnership profits be divided equally among the partners
True
False
Q20. Jack Equipment 125,000 120,000
Jill Furniture and Fixtures 130,000 125,000
Jill Machinery 200,000 200,000
In addition, the partners invested cash of P60,000 and P40,000 for Jack and Jill, respectively. The machinery is subject to a mortgage of P30,000.
If the mortgage will not be assumed by the partnership, how much is the capital of Jill?
a. P335,000
b. P175,000
c. P370,000
d. P365,000