ParCor Reviewer

True or False

1. When a partner leaves the 7. When a new partner

partnership the total assets purchases the interest of an
will not be affected existing partner, the total
False partnership capital increases.
False
2. Death of a partner and
withdrawal of an existing 8. It is possible to give bonus to
partner will have different both old and new partners.
accounting terms False
False
9. The total contributed capital
3. When the payment of a is the sum between the old
retiring partner is lesser than partner's investment and the
his capital balance the new partner's contribution. It
difference is treated as a is always equal to the
bonus to the remaining partnership agreed capital.
partner False
True
10. Adjustments are not
4. A new partner must have the necessarily prior to the
majority of the consent of the withdrawal of a partner
existing partner in order to be False
admitted in the partnership
False 11. In a contract of partnership,
two or more persons bind
5. Dissolution is the termination themselves, contribute
of the partnership while money, property, industry, to
liquidation is simply a change a common fund with
in the partnerships provision. intention of dividing the
False profits among themselves
True
6. Dissolution is always followed
by liquidation 12. A dormant partner is one that
False does not take active part in
the partnership business,
though may be known as a
partner
False
13. In a general partnership, its
partner's liability for losses is 19. The dissolution of the
limited to its investment in partnership discharges the
the firm existing liability of any
False partner.
False
14. The bonus is not being
considered in the 20. When a partner is
computation of profit rather it admitted, the partnership
is mere technical to distribute may continue operations
profit. based on the new contract
TRUE among the partners
True
15. The basis on which profits
and losses are shared is a 21. In the absence of a specific
matter of agreement among agreement, the law requires
partners and may not that partnership profits be
necessarily be the same as distributed equally among
their capital contribution partners.
ratio. False
True
22. Work or services that may
16. A partnership contract may either be personal manual
provide for a special efforts or intellectual may be
compensation in the form of contributed to a partnership
bonus to the managing True
partner when the results of
operations of the partnerships 23. Ownership is easily
are favorable. transferred in a partnership.
False True

17. A new partner cannot be 24. A partnership cannot be

admitted into a partnership established for religious
without the consent of all the purposes.
partners. True
True
25. Partnership must always
18. When a partner withdraws have at least two owners.
from a partnership, an audit True
may be performed and the
assets reappraised.
True
26. A proprietorship has a 33. A partnership should always
limited life whereas a be constituted in the writing.
partnership may have an FALSE (pwede rin na verbal
unlimited life. pero magiging magulo)
False
34. Public instrument needs to be
27. Not all of the partners in a executed when immovable
general partnership are property or real rights are
personally liable for all debts contributed to the
incurred by the partnership. partnership.
False, dapat all are liable TRUE

28. A proprietorship has a limited 35.The mutual agency means

life. that its partner has the right
True, because it is owned by to bind the partnership to
single individual contracts.
TRUE
29. Not all of the partners in a
general partnership are 36.As long as the action is within
personally liable for all debts the scope of the partnership,
incurred by the partnership. any partner can bring bind the
FALSE partnership.
TRUE
30.Accounting for a partnership
comes closer to accounting 37.When the partnership capital
for a sole proprietorship than is 3,000 or more, the public
to accounting for a instrument must be recorded
corporation. with the Securities Exchange
TRUE Commission.
TRUE
31. Partners' drawing accounts
have normal credit balances 38.A partnership with a capital of
FALSE (debit dapat) less than 3,000 pesos is valid
when it is unregistered with
32.The manner in which profits the Securities Exchange
are to be shared should be Commission.
specified in the article of TRUE
partnership.
TRUE 39.Two or more persons may
form a partnership for the
exercise of a profession
TRUE
 47.One of the partners in a
40. There can never be a proposed partnership is a
partnership without multi-millionaire. The
contribution of money, stipulation in the Articles of
property, or industry to a Partnership that this partner
common fund. shall be excluded from
TRUE sharing in the profits of the
partnership is disvalid.
41. Bankruptcy of a partner will FALSE (magiging unfair,
dissolve the partnership naginvest ka tapos wala kang
FALSE (partner lang ung na kikitain duhh)
bankrupt, hindi ung
mismong partnership) 48. Under the partnership
form of business, the large
42. A partnership involves amounts of capital can be
mutual agency, unlimited raised easily.
liability for general partner, FALSE (corpo ung mabilis na
and limited life. nakakapag raise)
TRUE
49. All partners in a general
43.A partnership and a partnership are personally
corporation cannot form a liable for all debts incurred by
partnership. a partnership.
TRUE TRUE

44. A de jure partnership is one 50. An advantage of the

which has complied with all partnership form of business
the legal requirements of its is that each partner's
establishment potential loss is limited to
TRUE that partner's investment in
the partnership.
45. In a limited partnership, FALSE
the general partner's liability
is limited to the investment. 51. A partnership is a legal entity
FALSE separate and apart from its
owner.
46. The limited partners are TRUE
liable only to the extent of his
personal contributions. 52.The process of valuation for
TRUE non-cash investment should
be fair market value
False
2. Barroga and Gonzales are partners who shares profits and losses in the ratio of
60:40, respectively.

Barroga's salary is P60,000 and P30,000 for Gonzales. The partners are also paid
interest on their average

capital balances. In 2020, Barroga received P30,000 of interest and Gonzales,

P12,000. The profit and loss

allocation is determined after deductions for the salary and interest payments. If
Gonzales' share in the

residual profit (profit after deducting salaries and interest) was P60,000 in
2020, what was the total

partnership profit?

a. 192,000 c. P345,000

b. 282,000 d. P387,000
3. Cabance, a partner in the Cabance and Mendoza Partnership has a 30% share in
the partnership profit

and loss. His capital account had a net decrease of P60,000 in 2020. In 2020, he
withdrew P130,000 against

his capital and invested property valued at P25,000 in the partnership. The profit of
the partnership is

a. 550,000 c.2333

b. 350,000 d. 150,000
4. Antipora and Sy are partners who share profits and losses after salary and
interest allowances in the

ratio of 60:40, respectively. Antiporda's salary is P20,000 and Sy's is P10,000. The
partners are also paid

interest on their average capital balances. In 2020, Antiporda received P10,000 in the
interest and Sy P4,000.

If Sy's share of partnership profit was P40,000 in 2020, what was the total
partnership profit?

a. 95,000 c.109000

b.100,000 d. 144,000
5. In its first year of operations, the partnership of Reyes, Balino and Dimalanta
made a profit of P20,000,

before providing for salaries of P5,000 and 3,000 per annum for Reyes and Balino,
respectively. The capital

contributions of the partners are as follows: Reyes, P30,000; Balino, P20,000 and
Dimalanta, P10,000.

Assuming that no profit and loss ration are provided in the partnership agreement
and there has been no

change in the capital contributions during the year, how much profit share would
Reyes be entitled to

receive?

a. 11,000 c. 10,000

b. 15,000 d. 5,000
6. If a partnership has profit of P44,000 and Partner Garcesa is to be allocated a
bonus of 10% of profit after

the bonus, Garcesa's bonus

would be

a. 4,400 c.4,0 00

b. 3,600 d. None of the above.

7. The Marasigan and Rosales partnership agreement provides special

compensation to the managing

partner, Marasigan; Marasigan receives a bonus of 15% of profit before salary and
bonus; and also receives

a salary and bonus; and also receives a salary of P45,000. Any remaining profit or
loss is to be allocated

equally. During 2020, the partnership had profit of P50,000 before the bonus and
salary allowances. As a

result of these distributions, Rosales' equity in the

partnership would

a. increase c. decrease the same as Marasigan

b. decrease d. not change

8. Abulencia and Daguiso have the following profit and loss agreement: salaries of
P30,000 and P45,000

for Abulencia and Daguiso, respectively; a bonus to Abulencia of 10% on average

capital balances of

P20,000 and P35,000 for Abulencia and Daguiso, respectively. One-third of any
remaining profit is allocated

to Abulencia and the balance to Daguiso. If the partnership had profit of P102,500,
how much should be

allocated to
Abulencia?

a. 41,000 c. 44,250

b. 41,167 d. 47,500
9. On Jan. 2, 2020, Basilio and Quezada formed a partnership. Basilio contributed
capital of P175,000 and

Quezada, P25,000. They agreed to share profits and losses in the ratio of 8:2,
respectively. Quezada is the

general manager and works in the partnership full time. Quezada is given a salary of
P5,000 a month; an

interest of 5% of the beginning capital (of both partners) and a bonus of 15% of
profit before salary,

interest and bonus. The statement of financial performance of the

partnership for the year ended

Dec. 31, 2020

follows:

Net Sales P875,000

Cost of Goods 700,000

Sold

Gross Profit P175,000

Expenses (including the 143,000

salary, interest and the
bonus)

Profit P32,000

The amount of bonus to Quezada in 2020 amounted to:

a. 16,456 c. 20,700

b. 13,304 d. 18,000
10 Nabua is trying to decide whether to accept a salary of P40,000 or a salary of
P25,000 plus a bonus of 10%

of profit after the bonus as a way of dividing profits among the partners. What
amount of profit would

make the choices

equal?

a. 150,000 c.
15,000

b. 165,000 d. 135,000

11 Tanupan is trying to decide whether to accept a salary of P40,000 or a salary of

P25,000 plus a bonus of 10% of

profit after salaries and bonus as a way of dividing profits among the
partners. Salaries traceable to the other

a. 165,000 c. 290,000

b. 265,000 d. 305,000
12. Hermocilla, Gonzaga, and Mallari are partners with average capital balances
during the year of P120,000,

P60,000 and P40,000, respectively. Partners receive 10% interest on their average
capital balances. After

deducting salaries of P30,000 to Hermocilla and P20,000 to Gonzaga, the residual

profit or loss is divided equally.

The partnership sustained a P33,000 loss before interest and salaries to partners. By
what amount should

Hermocilla's capital account

change?

a. 42,000 increase c. 11,000 decrease

b. 35,000 decrease d. 7,000 decrease

13. Espiritu and Cheng have the following profit and loss agreeement: salaries of
P30,000 and P45,000 for Espiritu

and Cheng, respectively; interest 10% on average capital balances of P20,000 and
P35,000 for Espritu and Cheng,

respectively; and any balances of P20,000 and P35,000 for Espiritu and
Cheng, respectively; and any balance

equally. If the profit is P102,500, how much should

be allocated to Espiritu?

a. 58,250 c. 44,250

b. 47,796 d. 44,125
14. Santos and Gloria share profits in the ratio of 3:2. However, Santos is to receive
a bonus of 20% of the profits,

in addition to his profit share. The partnership made a profit for the year of P24,000
before the bonus. Assuming

Santos' bonus is computed on profit after deducting said bonus, how much
profit share will Gloria receive?

a. 15,200 c. 9,600

b. 8,000 d. 9,000
15. Ravelo and Febrero are partners agreeing to allow monthly salaries of
P6,000 and P5,000,respectively; 6%

interest on the capital investment at the beginning of the year of P300,000 and
P230,000, respectively; and the

balance equally. The first year registered a profit of P100,000. The

partners' share should be

a. Ravelo, P58,100; Febrero, P41,900

b. Ravelo, P56,600; Febrero,

P43,400

c. Ravelo, P54,500; Febrero, P45,500

d. Ravelo, P50,000; Febrero,

P50,000
16. The partnership agreement of Santiago and Generals provided that
interest of 10% per annum is to be

credited to each partner on the basis of average capital balances. A summary of

Generales' capital account for the

year ended Dec. 31, 2020

follows:

Balance, P280,000
Jan.1

Additional 80,000
Investment, July 1

Withdrawal, -30,000
Aug.1

Balance, P330,000
Dec.31

The amount interest that should eventually be credited to

Generales' capital is

a. 30,500 c. 30,750

b. 33,000 d. 34,500
17. Un, Balaba, and Monta are partners with average capital balances
during 2020 of P360,000, P180,000, and,

P120,000, respectively. Partners receive 10% interest on their average

capital balances. After deducting salaries

of P90,000 to Un and P60,000 to Monta, the residual profit or loss is divided

equally. In 2020, the firm sustained a

P99,000 loss before interest and salaries to partners. By what amount

should Un's capital account change?

a. 105,000 c. 21,000 increase

decrease

b. 33,000 decrease d. 126,000

increase
18. Partner Quito had a beginning capital balance of P35,000 and made additional
investments of P27,000 during

the year. In the same year, Quito made drawings of P5,000 per month. THe
post-closing capital balance of Quito

is P72,000. What is his share in the

partnership profit?

a. 70,000 c. 60,000

b. 15,000 d. 72,000

Carlos and her very close associate Liggayu formed a partnership on Jan. 1, 2020
with Carlos contributing P16,000
19

cash while Liggayu and inventory items with a book value of P2,400 and a fair value
of P3,200. During 2020, Liggayu

made additional investments of P1,600 on April 1 and P1,600 on June 1, and

on Sept. 1, he withdrew P4,000.

Carlos had no additional investments or withdrawals during the year. The average
capital balance at the end of 2020

for Liggayu is

a. 7,200 c. 8,800

b. 8,000 d. 9,600
20. Langbay, Villota and Hernandez are partners in an accounting firm. Their
ending capital account balances were:

Langbay, P90,000; Villota, P110,000 and Hernandez, P50,000. They share profits
and losses in a 4:4:2 ratio, after the

following special
terms:

* Partner Hernandez is to receive a bonus of 10% of the

profit after bonus.

* Interest of 10% shall be paid on that portion of the partner's

capital in excess of P100,000.

* Salaries of P10,000 and P12,000 shall be paid to partners langbay and

Hernandez, respectively.

Assuming profits of P44,000 in 2020, the total profit share

of Hernandez would be

a. 7,800

b. 19,800

c. 16,800

d. 19,400
1. The partnership agreement of Niza and Sala provides the interest at 10% per year
is to be credited

to each partner on the basis of weighted-average capital balances. A summary of

Sala's capital account

for the year ended Dec. 31,2020

follows:

Balance, Jan.1 P420,000

Additional Investment, 120,000

July 1

Withdrawal, -45,000
Aug.1

Balance, 495,000
Dec.31

What amount of interest should be credited to Sala's capital

amount for 2020?

a. 45,750 c. 49,500

b. 46,125 d. 51,750
1. A partner cannot bind the partnership to an outside purchase contract when?

A, the item purchased is immaterial in amount.

B, the item purchased is not within the normal scope of the business.
C, the partners who made the purchase withdraw from the partnership.
D, the partner was not authorized by the other partners to make the purchase.

2. Which of the following is not a characteristic of the partnership?

A, voluntary association.
B, mutual agency.
C, limited liability
D, limited life.

3. A partner whose liability for partnership debts is only to the extent of what he has invested in
the partnership is called?

A, limited partner.
B, general partner.
C, industrial partner.
D, nominal partner.

4. Partners' investment may include which of the following?

A, cash.
B, non-cash assets.
C, non-cash assets without tax liability assumed by the partnership.
D, only A and B.
E, ALL OF THE ABOVE

5. When a partner invests non-cash assets into the partnership, this asset should be recorded at?

A, their book value.

B. their original cost to the previous owner.
C, their fair market value.
D, the value assigned by the contributing partner.

6. A partner who contributes expertise, services, or industry to the common fund of the
partnership is called?

A is limited partner.
B, capitalist partner.
C, money-making partner.
D, industrial partner.
7. A partnership means

A, is created by agreement of the partners.

B, as a juridical personality distinct and separate from that of each of the partners.
C, may be constituted in any form except where a movable property is considered, in which case the
law requires that a public instrument be executed.
D, all of the above.
E, none of the above.

8. One of the following is not a characteristic of a contract of partnership.

A, principal because it can stand by itself.

B, preparatory because it is means by which other investment will be entertained.
C, real, and the partners must deliver their contribution in order for the partnership.
D, contract to be perfected.
E, onerous because the partners contribute money, property, or industry to the common fund.

9. One of the following is not a requisite of partnership. Which is?

A, there must be a valid contract.

B, there must be a mutual contribution of money, property, or industry to a common fund.
C. it is established for the common benefit of the partners.
D, divide the same among themselves.
E, the articles are kept secret among the members.

10. A partnership formed for the exercise of a profession which is duly registered is an example
of?

GENERAL PROFESSIONAL PARTNERSHIPS

The following are the essential elements or features of a partnership except.

A, must have a lawful object or purpose.

B, there must be a contribution of money, property, or investments.
C, the intention to divide and to continue…kinemelyn…FOR OTHER PEOPLE
D,

Partner who manages actively the firm's affairs is called?

A, silent.
B, liquidating.
C, managing.
D, dormant.
11. Who is actively managing the business? What kind of partnership is he?

MANAGING PARTNER

Partner who does not participate in the management but he shares in the profits or losses is called?

A.Liquidating.
B, nominal.
C, ostensible.
D, silent.

12. A partner can engage in business for himself without the consent of his co-partners. If he is

A, capitalist partner, whether or not the business will engage in is of the same kind or different
from the partnership business.
B, industrial partner, whether or not the business he will engage in is of the same kind as or
different from the partnership business.
C, a capitalist partner and the business he will engage in is of kind different from the partnership
business.
D,industrial partner, and the business he will engage in is of kind different from the partnership
business.

13. A partner's interest in the partnership is his share of the profit in surplus which he may assign
to the third person which is of the following statement concerning such right is correct.

A, the convenience of a partner's interest will cause the dissolution of a partnership.

B, the assignee becomes a partner.
C, the assignee has the right to interfere in the management of the partnership business.
D, the assignee has the right to receive the profit which the assigning partner would otherwise be
entitled there to. (ito ata answer dun,di ko maalala huhuhuhu) tamaa

14. A newly admitted general partner is liable to the creditor existing at the time of his admission
and the liability is

A, up to his capital contribution only if there is stipulation.

B, up to his separate property even if there is
C, capital contribution even if there is stipulation.
D, up to his separate property even only if there is stipulation.

15. The remedy of capitalist partners against an industrial partner who engages in a business for
himself without the express permission from the partnership

A, to compel him to sell his interest to the said capitalist partner.

B, to exclude him from sharing in the profits of. 01:00:47
C, to exclude him from sharing in the profits of the partnership.
D, to expel him from the partnership and claim for damages.
16. A partnership which comprises all the profits that all the partnerships acquired by their work
or industry during the existence of the partnership is called.

A, a de jure partnership
B, a universal partnership of profits.
C, particular partnership.
D, universal partnership of all present property.

17. A partnership without a definite period of existence and which can be dissolved at any time by
any of the partners is called.

A universal partnership of the present property.

B, universal partnership of profits.
C, particular partnership.
D, partnership at will.

18. Which among of the following is not a characteristic of a partnership firm?

A, easy formation.
B, equal profits.
C, limited liability.
D, mutual consent.

19. which of the following is a characteristic of most partnerships?

A, limited liability.
B, division of profits only.
C, unlimited life.
D, mutual contribution.

20. Which of the following is not a characteristic of partnership life?

A, easy formatipn.
B, equal profits.
C, limited liability.
D, mutual consent.
21. A partnership is

A, is created by agreement of the partners.

B, as juridical personalities separate and distinguish from each other of the partners.
C may be constituted by form except when immovable property or rights are contributed, in which
case the law required the public instrument be executed.
D, is dissolved by death of the partner.
E, all of the above.

22. An advantage of the partnership as a form of business organization would be?

A, partners do not pay income taxes on their share in partnership.

B, the death or withdrawal of a partner may terminate a partnership.
C, a partnership is created by mere agreement of the partners.
D, partnership is bound by the acts of the partners.
E. All of the following are true for both general