AKLAN STATE UNIVERSITY

SCHOOL OF MANAGEMENT SCIENCES
Banga, Aklan

Final Examination in BEC 1/ BCC 2
Name: Course: Date:

TEST I: IDENTIFICATION – Write your answer in the space given before the number.
__________________1. The change in the relation of the partner ceasing to be associated in the carrying on the
business. (Dissolution)
__________________2. Method in dissolution where contributed capital is equal to agreed capital. (Bonus Method)
__________________3. Method in dissolution where contributed capital is less than the agreed capital. (Goodwill
method).
__________________4. The process of converting all assets of the business into cash. (Realization)
__________________5. The process where final payment to the outside creditor and partners made. (Liquidation)
__________________6. A financial report that shows the summary of winding up the affairs of the partnership including
the priority of cash distribution. (Statement of Liquidation)
__________________7. When non-cash assets of the partnership are sold at a lesser price than their recorded value the
partnership incurred. (Loss on Realization)
__________________8. Also known as “piecemeal Liquidation” which involved payments to creditors and partners as
proceeds of sale of non-cash assets are made. Cash payments to creditors and partners are on
installment basis as cash becomes available. (Installment Liquidation)
__________________9. Conservative approach to liquidation. It is prepared when there is availability of cash after
payment to the outside creditors was made. It indicates how the available cash should distributed to
partners. (Schedule of Safe Payment)
__________________10. An artificial being created by operation of law having the right of succession and the
powers, attributes and properties expressly provided by the law or incident to its existence.
(Corporation)
__________________11. Corporations issues shares of stock to the shareholders, who are entitled to receive
dividends representing their earnings from the corporation. (Stock Corporation)
__________________12. Corporations do not issue shares of stocks because they are created for civic, charitable
or religious purpose. (Non-Stock Corporation)
__________________13. They are called the “founders of corporation”. (Incorporators)
__________________14. Those who have made an agreement with the corporation to buy the corporate capital
stock at future payments. (Subscribers)
__________________15. Regulations, ordinances, rules or law adopted by any association or corporation for its
government. (By – Laws)
__________________16. Shares that reacquired but not retired. (Treasury shares)
__________________17. It is also called “excess over par value”. (Share Premium)
__________________18. A shares that issued below its par value. (Watered Stock)
__________________19. A corporation that fails to comply with the requirements of law. (De Facto Corporation)
__________________20. A corporation established for charitable institution. (Eleemosynary Corporation)
(By – Laws) (Non-Stock Corporation) (Schedule of Safe Payment)
(Loss on Realization) (Bonus Method) (Dissolution)
(Liquidation) (Corporation) (Statement of Liquidation)
(Installment Liquidation) (Realization) (Goodwill method)
(Stock Corporation) (Incorporators) (Subscribers)
(De Facto Corporation) (Watered Stock) (Treasury shares)
(Eleemosynary Corporation) (Share Premium)

TEST II: Multiple Choice – Choose the letter that correspond to the best answer.

______1. The following instances dissolve a partnership.
a. Admission of a new partner c. Conversion of a partnership
b. Change in the name of the partnership d. Revaluation of partnership assets.

The maximum number of shares that the government gives a corporation permission to issue is the a. Mutual agency b. The order of partnership liquidation process is i. Partner’s loan to the partnership d. Increase in total partnership’s capital c. No bonus to all partners b. I. I. If the new partner is admitted by purchase of interest of an old partner at an amount higher than its book value. The admission of new partner by direct investment in the partnership will result in the increase a. ______4. b. this will result in a. Limited liability of shareholders d. Partnership liabilities c. Bonus to new partner c. Retirement of a partner by settlement equal to his interest. Authorized shares d. a. ______6. Which of the following would not be considered a characteristic of a corporation? a. Permanent withdrawals by partners. Bonus to old partners d. Profit or loss agreement of existing partnership b. Decrease in total partnership’s net assets d. II. Partners based on the profit and loss sharing ratio ______12. In a partnership liquidation. No change in old partner’s capital ______8. but bonus. The following transaction will affect the balance of the partnership total capital except a. Change in civil status of a partner. Issued shares b. II. Retirement of a partner c.______2. Selling non-cash asset a gain b. The partnership generates net income for the year. The partnership’s assets and total capital ______7. A partner’s interest includes a. a loss from sale of non-cash assets is allocated to the a. Separate legal entity c. In total partnership’s capital c. Disburse cash ii. Additional investment d. Admission by purchase without implied goodwill. A and B ______10. c. Goodwill to incoming partner. III. Granted shares c. it is allocated among them according to the a. III. III d. d. II ______11. III c. II. Capital ratio of existing partners d. If bonus is traceable to the existing partners. Death of a partner b. Sell assets a. ______3. Outstanding shares . The old partners’ capital d. Offsetting against a partner’s loan c. Both A and B ______13. A only b. When a new partner is admitted by his direct investment in the partnership and if his agreed capital credit is more than his total contributed capital. Which of the following is not a caused of partnership dissolution? a. Partner with the lowest capital balance b. Pay liabilities iii. In the partnership’s assets b. Partners based on their capital balances d. Claim from new partner ______5. Capital balances c. I b. Loss to the other partners ______9. A capital deficiency can be eliminated by the following except a. No change in partnership’s net assets b. I. Admission of a new partner d. Profit or loss agreement of new partnership c.

000 P 5. P 100. Authorized Capital Subscribed Capital Paid in Capital a P 100. A only d. rules or laws adopted by any association or corporation for its government” a. How much is the amount of share premium above par? a. Ownership shares can be easily transferred.000 b.000. At least 25% of the total subscriptions have been paid c. 000 c P 50.000.000. P 30.000 d. 125 d P 50. P 25. P 150.000 P 12. Stockholder b. a. how much is the par value per share.000 d. Which of the following is not a characteristic of a corporation? a. Promoters b.000 ______20.500 P 3. It is the “regulations ordinances.000 P 5.500 b. P 10 c. Par value of shares ______15. A partnership liquidates and finds an excess cash. Which of the following persons agrees to take or buy stocks from the corporations a. a. By-laws c. P 25. Trustees or BOD rules and regulations ______18. Z Company received P 750. Choose the situation that illustrate the minimum requirement of the law for corporate formation. Unlimited liability b. Refer your answer in #15.000. Corporators d. P 100. Which of the following is a disadvantage of the corporate form of business? a. P 30 ______21. 000 P 12. Transferability of ownership d. Articles of Incorporation b. P 60. P 12. Owner’s liability is limited. Incorporators c. ______22. P 187. P 20. Using the given in # 19. after payment of liabilities of P 100. Artificial being ______19. 000 ______17.500 P 5.000 c. c. Book value b.000. At least 25% of the total authorized share has been subscribed b. P 25.000 . Separate legal existence c. Fair market value of non-cash assets received c. 125 b P 100.000.000 for 25.000.000 c. P 200. Corporation lacks mutual agency b.______14.0000 P 3. 25% rule means that a.000. Person who compose the corporation whether as stockholders or members. P 125. P 25. A non-cash assets received in exchange for share capital is recorded at a.000 P 15. P 10. P 20. P 8.000. P 40. The four partners will receive a final distribution of cash as follows.000. P 100. P 25 b. Incorporators c. Both A and B ______16. The four partners have equal capital balances and share profit and losses in the ratio of 10:20:30:40. Member d.000. Ownership is separated from control of operation d.000.000 share subscription 5 peso above par from its incorporators to comply with the minimum incorporation paid-up share capital requirement.000. P 20 d. Fair market value of shares d. a. Subscriber ______24. P 100. Subscriber ______23. Policy d. The Security and Exchange Commission (SEC) 25%.

P80. ______25. Conn and Cass form a partnership and have capital balances of P100. The total capital balances of the partners prior to the admission of Castro is P360.000 shares at P10. P100.000 and P200. There is P550. what amount is credited to the capital account of Castro upon his admission? a. Depreciation expense b. Cash c. Notes payable ______26. 100.00 par value. LEGASPI. P120.D. VILLANUEVA. respectively.000 ______29.000 ______27. If the share capital is no par and no stated value and the cost of the land is P200.000 ______28. P200.000 share issued. P 200. C company have an authority to issue 100. the settlement to retiring partners includes the following except a. P2.000. How many share is still unissued? a.000 and a market value of P12. The amount to be credited to share premium should be. Castro contributes P120.000 for a 1/6 interest in a partnership. P1.000 of its ordinary shares with P10 par for an equipment with book value of P11. P120.000.000 b.000 for how much is the land to be recorded? a.000.000 c.000 d. a.000 c. D’s ordinary shares was selling at 15 per share at the date of issuance.000 b.000 c. LACHICA Instructor III ARJAY D. P 0 d. how much will he have to invest to have one-third interest? a.000. Dean . B company issued 20. P160.000 b. P96.000 d.000 shares b. P 500.000 c. 50. P 0 GOODLUCK & GOD BLESS  Prepared by: DOREEN D.000 shares ______30.000 shares d. If there is no assets revaluation is made prior to the admission of Castro. If they agree to admit Charr into the partnership.000 share capital receiving land with fair value of P500. P 300. D company issued 1. 55.000 d. CPA Instructor Noted by: CECILE O. PH. 45. P5. When the partnership purchases a retiring partner’s interest.000 b. P150. Equipments d.000 shares c.