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Parcor Exam

The document contains 33 multiple choice questions about various aspects of corporate and partnership accounting. Specifically, it covers topics such as dividend distribution, types of partnerships, debt ratios, partnership admissions, liquidation processes, types of shares, accounting for treasury shares, liability of partners, and more. The questions are posed with multiple choice answer options to test understanding of key concepts.

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Rose Ann Garcia
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455 views2 pages

Parcor Exam

The document contains 33 multiple choice questions about various aspects of corporate and partnership accounting. Specifically, it covers topics such as dividend distribution, types of partnerships, debt ratios, partnership admissions, liquidation processes, types of shares, accounting for treasury shares, liability of partners, and more. The questions are posed with multiple choice answer options to test understanding of key concepts.

Uploaded by

Rose Ann Garcia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. Unrestricted accumulated profits could not longer be distributed to shareholders even after it reversion.

ANS. TRUE

2. This is the process of formality organizing a corporation.


ANS. INCORPORATION

3. Which of the following is not allowed for dividend distribution?


ANS. TREASURY SHARES

4. The liability of stockholder is


ANS. LIMITED TO THEIR INVESTMENT

5. Which of the following partnership is established and organized in compliance with all the legal requirements for its
existence?
ANS. DE JURE

6. Shows the percentage of the corporation’s assets financed by debt


ANS. DEBT TO TOTAL ASSETS RATIO

7. The following transactions will affect the balance of the total partnership capital except
ANS. ADMISSION BY PURCHASE W/O IMPLIED GOODWILL BUT WITH BONUS

8. Which of the following is not correct regarding the admission of a new partner
ANS. THE ADMISSION BY PURCHASE OF INTEREST OF AN EXISTING PARTNER NEED NOT HAVE THE CONSENT OF REMAINING
PARTNER

9. The main characteristic of a lump sum liquidation done in one transaction is that all the
ANS. ASSETS ARE SOLD IN ONE TRANSACTION AND ALL THE AVAILABLE CASH IS DISTRIBUTED TO CREDITORS AND
PARTNERSIN ONE TRANSACTION

10. If bonus is traceable to the existing partners, it is allocated among the, according to the
ANS. PROFIT / LOSS AGREEMENT OF THE EXISTING PARTNER

11. Bonus to the managing partner will be given in the following instances except when there is
ANS. LOSS

12. Between book value and the cash proceeds is called


ANS. GAIN/LOSS ON REALIZATION

13. Upon partnership liquidation, payments should be made in order of priority


ANS. OUTSIDE CREDITORS, LOAN PAYABLE TO PARTNERS, PARTNER’S CAPITAL CREDIT BALANCE

14. A partnership is considered to be insolvent when


ANS. ITS LIABILITIES EXCEED ITS ASSETS

15. The partner who has priority to first receive cash distribution under an advance cash distribution plan is the partner who
ANS. CAN ABSORB THE LARGEST LIQUIDATION LOSS

16. When a partner is personally insolvent and has a debit balance in his or her partnership capital account, the personal assets
should be distributed as follows:
ANS. TO THE PERSONAL CREDITORS IN FULL PAYMENT OF THEIR CLAIMS FIRST,TO THE PARTNERSHIP CREDITORS SECOND,
AND TO THE OTHER PARTNERS LAST.

17. This preference share is protected by the right to receive undeclared dividend intended for years
ANS. CUMULATIVE

18. If all the liabilities have been recorded and no additional expenses are expected, the maximum loss a partnership can
realize is the
ANS. BOOK VALUE OF THE NONCASH ASSETS PLUS THE RECORDED LIABILITIES

19. Which of the following is not a characteristic of a corporation?


ANS. UNLIMITED LIABILITY
20. What is the accounting treatment for a corporate organization cost?
ANS. OTHER ASSET

21. This document is an evidence of ownership interest in a profit corporation


ANS. STOCK CERTIFICATE

22. Which of the following is included in the equity section of a corporate business?
ANS. INVESTMENT IN EQUITY SHARES

23. Identify the most acceptable value of share capital in exchange of noncash assets
ANS. FAIR MARKET VALUE OF NONCASH ASSET RECEIVED

24. The following will increase the number of outstanding shares, except
ANS. RETIREMENT OF TREASURY SHARES

25. Which of the following will not require journal entry under the memo entry method?
ANS. RE-ACQUISITION OF PREVIOUSLY ISSUED SHARES

26. In general, partners have unlimited liability but which type of partners does not have unlimited liability
ANS. LIMITED PARTNERS

27. Re-issuance of treasury shares at above cost will increase the share capital premium
ANS. TRUE

28. Which of the following statements is not correct?


ANS. TREASURY SHARES ARE NOT ENTITLED TO RECEIVED DIVIDEND

29. Which of the following transaction is not subsequent share capital transaction?
ANS. RETIREMENT OF SHARE CAPITAL

30. APL Corporation has a 6% participating preference shares issue, along with an ordinary shares issue. Which of the following
statements is true?
ANS. PARTICIPATING PREFERENCE SHAREHOLDERS RECEIVE A MINIMUM PAYMENT OF 6%

31. When preference shareholders have the right to receive a specified dividend and to receive more after a matching dividend
percentage is given to ordinary shareholders, the preference shares are said to be
ANS. COLLABLE

32. What do you call a partner who is appointed to administer the realization and distribution of partnership assets after
dissolution?
ANS. LIQUIDATING PARTNER

33. The division of partnership profile on the basis of salaries, interest and an agreed ratio is ussually necessary because
ANS. THIS REFLECTS THE AMOUNT OF TIME DEVOTED TO THE PARTNERSHIP BY THE PARTNERS

34. As a rule, the personal assets of the partners shall first be applied to their respective personal creditors
ANS. TRUE

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