THEORETICAL QUESTIONS

Direction: Write the word CHUGUG if the statement is correct and O LOKO if the statement is incorrect on the blanks provided
before the number.

________1. A partner is entitled to a bonus only if the partnership earns profit.

________2. If only the share in profits has been agreed upon, the share in losses shall be divided equally.
________3. A de jure partnership is now which has complied with all the legal requirements for its establishment.
________4. The basis of valuation of noncash investments should always be at fair market value.
________5. Any partner can bind the other partners to a contract if he is acting within his express or implied authority.
________6. Silent partner is one who takes active part in the business but is not known to be a partner by outside parties.
________7. Secret partner is one who does not take active part in the business of the partnership and is not known as a partner.
________8. Partnerships, including general professional partnerships, are subject to tax at the rate of 30%.
________9. Permanent withdrawals are made with the intention of permanently decreasing the partner’s capital.
________10. Temporary withdrawals are regular advances made by the partners in anticipation of their share in profit.