RFBT 8608 1

CONTRACT OF PARTNERSHIP
1. It is a contract of two or more persons who bind themselves to contribute money,

property, or industry to a common fund, with the intention of dividing the profits
among themselves. It may also be formed by two or more persons for the
exercise of a common profession.
a. Contract of Agency
b. Contract of Partnership
c. Contract of Co-ownership
d. Contract of Sale
2. Which partnership is a taxable corporation for purposes of income taxation under

NIRC?
a. General Professional Partnership
b. Commercial or Business Partnership
c. Both A and B
d. Neither A nor B
3. The following are the characteristics of a contract of partnership, except

a. Consensual - It is perfected mere consent except in case real property is
contributed that requires certain formality for validity.
b. Principal -- It does not depend upon any other contract for its validity or
existence.
c. Bilateral or Multilateral - It is entered into by two or more persons whose
rights and obligations are reciprocal.
d. Nominate - It has a special name given to it by law.
e. Preparatory - It is a means by which other contracts will be entered into as the
partnership pursues its business.
f. Onerous - The partners contribute money, property or industry to a common
fund with the intention of dividing profits among themselves except in case of
universal partnership which is a gratuitous contract.
g. Accessory - Its existence is dependent upon a principal contract.
4. The following are the essential requisites of partnership, except

a. There must be a valid partnership contract.
b. There must be a mutual contribution of money, property or industry to a
common fund.
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c. It must have a lawful object or purpose.
d. The partnership must be established for the common benefit or interest of the
partners which is to obtain profits and to divide the profits among the partners.
e. The partnership must be registered in the SEC.
5. When an unlawful partnership is dissolved by a judicial decree, to whom shall

the partnership profits go?
a. To the innocent partner.
b. To the guilty partner.
c. To all the partners pro-rata.
d. To the state.
6. Which of the following statements concerning associations and societies, whose

articles are kept secret among the members, and wherein any one of the
members may contract in his own name with third persons is correct?
a. They shall have separate juridical personality.
b. They shall be treated as a corporation.
c. They shall be treated as a partnership.
d. They shall be governed by the rules on co-ownership.
7. The following statements concerning partnership are correct, except

a. Partnership is a juridical entity which has a personality separate and distinct
from that of each of the partners.
b. There must be intent to form a partnership.
c. There is fiduciary relation among partners.
d. All partnership contracts are consensual.
8. It is a principle which means that a partner has a right to choose those whom he
wants to be associated with the partnership.
a. Delectus personae
b. Deletus militus
c. Dilitus trustus
d. Deletos fructus
9. The following statements pertaining to the forms of contract of partnership are
correct, except
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a. As a general rule, a partnership contract may be constituted in any form,
whether written or oral, to be valid because it is perfected by mere consent.
b. Where immovable property or real rights are contributed to the partnership,
regardless of the amount thereof, the partnership contract must be in a public
instrument and an inventory of the said real property or real rights must be
made, signed by the partners and attached to the public instrument, in order
for it to be valid.
c. Where the capital of the partnership is P3,000 or more, in money or property,
the partnership contract must be in a public instrument and registered with the
SEC, in order for it to be valid.
d. If the partnership is a limited partnership, a certificate of limited co-partnership
must be signed under oath by the partners and must be recorded with the
SEC, otherwise the partnership will be considered as a general partnership as
to third persons but continue to be limited partnership among the partners.
10. What is the effect if a contract of partnership with a capital of at least P3,000 in
money is not in a notarized document and not registered with SEC?
a. The contract of partnership is null and void.
b. The partnership shall be classified as a corporation.
c. The partnership shall be classified as a sole proprietorship.
d. The liability of the partnership and the partners thereof to third persons will
not be affected.
11. A and B orally entered into a contract of partnership whereby A contributed

building while B contributed land. The partnership business is being operated by
the partners for almost 10 years already. A and B divided equally the profits for
10 years. What is the status of the contract of partnership after 10 years of
operation?
a. It is void both as to the contracting parties and to third persons because the
contract of partnership is not in a public instrument and an inventory of the
immovable property is not signed and attached to the public instrument.
b. It may be considered valid as to the contracting parties on the basis of
doctrine of estoppel but it may be considered void as to third persons for
failure to comply with the formality required by law.
c. It is rescissible both as to the contracting parties and to third person because
it is intended to defraud third person.
d. It is unenforceable both as to the contracting parties and to third person
because it violates status of fraud.
12. A and B orally entered into for the formation of partnership business. A will
contribute PIM while B will contribute a car. They will deliver the agreed
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contribution to the partnership three years from the date of oral agreement. What
is the status of the agreement to form a partnership business?
a. Voidable
b. Unenforceable
c. Void
d. Rescissible
13. An insane and a capacitated person orally entered into a contract of partnership.
The insane contributed a car while the capacitated person contributed P1M cash.
What is the status of contract of partnership?
a. Voidable on the part of the insane partner
b. Unenforceable
c. Void
d. Rescissible
14. An insane and a demented person orally entered into a contract of partnership.
The insane contributed a car while the demented person contributed PIM cash.
What is the status of contract of partnership?
a. Voidable
b. Unenforceable
c. Void
d. Rescissible
15. Which of the following is generally not allowed to enter into a contract of
partnership?
a. Any natural person who is capacitated
b. Another partnership
c. A professional
d. A corporation
16. The following cases on their own do not necessarily establish a partnership,
except
a. Persons who are not partners to each other.
b. Co-ownership or co-possession, whether such co-owners or co-possessors
do or do not share any profits made by the use of the property.
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c. Sharing of gross returns, whether or not the persons sharing them have a
joint or common right or interest in any property from which the returns are
derived.
d. Receipt by a person of a share of the profits of a business.
17. Which of the following is a prima facie evidence that a person is a partner in a
partnership business?
a. Receipt by such person of a share of the profits of a partnership business
b. Being co-owner in a co-owned property
c. Sharing of gross returns in a co-owned property
d. Being a co-possessor of a co-possessed property
18. As a general rule, the receipt by a person of a share of the profits of a

partnership business is a prima facie evidence that he is a partner in said
partnership business. However, the following are the exceptional cases wherein
the receipt by a person of a share of the profits of a business shall not be
considered a prima facie evidence that he is a partner in such business, except
a. As a debt by installment or otherwise.
b. As wages of an employee.
c. As rent to a landlord.
d. As an annuity to a widow or representative of a deceased partner
e. As interest on a loan, though the amounts of payment vary with the profits of
the business.
f. As the consideration for the sale of a goodwill of a business or other property
by installment or otherwise.
g. As a return of the contribution or a return of investment in the business.
19. This is a type of partnership in which the partners contribute all the property
which actually belonged to them at the time of perfection to the common fund,
with the intention of dividing the same among themselves, as well as the profits
which they may acquire therewith.
a. Universal partnership of all present property
b. Universal partnership of profits.
c. Particular partnership
d. General professional partnership
20. The following properties shall belong to the common fund in a universal
partnership of all present property, except
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a. Property belonging to the partners at the time of the constitution of the
partnership
b. Profits that may be acquired from the present property.
c. Property acquired by each partner after the formation of the partnership if
stipulated.
d. Profits and fruits from property acquired by each partner, even those from
property acquired by inheritance, legacy or donation after the formation of the
partnership if stipulated.
e. Property acquired by inheritance, legacy or donation after the formation by
the partnership if stipulated
21. This is a type partnership whereby the common fund comprises only all that the
partners may acquire by their work or industry during the existence of the
partnership.
a. Universal partnership of all present property.
c. Particular partnership.
d. General professional partnership
22. The following properties shall belong to the common fund in a universal
partnership of profits, except
a. Profits obtained by the partners by their work or industry during the existence
of the partnership.
b. The usufruct or use of the property belonging to each partner at the time of
the constitution of the partnership.
c. The profits and fruits from the properties mentioned in letter a and b.
d. The profits and fruits, if stipulated, of the property acquired by each partner
after the constitution of the partnership.
e. Profits acquired by the partners without the exertion of physical or intellectual
efforts, such as those acquired by chance or lucrative title if stipulated.
23. The articles of universal partnership is entered into without specification as to its
nature. What shall be its construction or interpretation?
a. It is a particular partnership.
b. It is a universal partnership of all present property.
c. It is a universal partnership of profits.
d. It is a general professional partnership.
24. The following persons cannot enter into a universal partnership but can enter into
a particular partnership, except
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a. Husband and wife
b. Persons who were guilty of adultery or concubinage at the time of formation
c. Persons who were guilty of the same criminal offense
d. Public officer or his wife, descendants or ascendants and another person by
reason of the public officer's position
e. Sisters and Brothers
25. It is a type partnership which has for its object determinate things, their use or
fruits, or a specified undertaking, or the exercise of a profession such as General
Professional Partnership.
a. Universal partnership of all present property.
c. Particular partnership
d. Ordinary partnership
26. Which of the following statements pertains to partnership by estoppel?
a. It is a partnership where all the partners are liable to the extent of their
separate property after the partnership assets have been exhausted.
b. It is a partnership where there is at least one general partner who is liable up
to the extent of his separate assets and at least one limited partner who is
liable up to the extent of his investment in the partnership.
c. It is a partnership which actually exists among the partners as well as to third
persons.
d. It is a partnership which in reality is not partnership but is considered as one
with respect to those who, by reason of their conduct or admission, are
precluded from denying its existence.
27. Which of the following statements pertains to general professional

partnership?
a. It is a partnership which is established by the lapsing of time.
b. It is a partnership that exists both in fact and in law.
c. It is a partnership that exists in fact but not in law.
d. It is a partnership that is taxable like a corporation in so far as income tax is
concern.
e. It is a partnership that is exempted from income tax.
28. Which of the following statements pertains to partnership at will?

a. It is one for which a period for its duration is fixed by the partners.
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b. It is one which is organized for a certain undertaking which, when attained,
will cause the termination of the partnership.
c. It is one where no period is fixed by the parties for its duration
29. Which of the following statements pertains to a general-limited partner?

a. He is one who is liable for partnership debts to the extent of his separate
property after all the assets of the partnership have been exhausted.
b. He his one who is liable for partnership debts to the extent of his capital
contribution only.
c. He is one who has all the rights and powers and is subject to all the
restrictions of a general partner, except that, in respect to his contribution, he
shall have the rights against the other members which he would have had if
he were not also a general partner
30. Which of the following statements pertains to a capitalist-industrial partner?

a. He is one who contributes money or property to the common fund.
b. He is one who contributes his services or industry to the partnership.
c. He is one who contributes not only money or property but also his services to
the partnership.
31. Which of the following statements pertains to an ostensible partner?

a. He manages the business or affairs of the partnership.
b. He takes charge of the winding up of the affairs of the partnership after it is
dissolved.
c. He is not actually a partner but who may become liable as such to third
persons.
d. He is one who is active in management of partnership business and known to
the public as a partner, such as by allowing his name to be included in the
firm name.
32. Which of the following statements pertains to dormant partner?

a. He is one whose connection with the partnership is kept from the public.
b. He is one who has no voice in the management of the business.
c. He is who does not participate in the management of the business and not
known to the public as a partner.
d. He is one who is no longer a partner of business but has left his capital in the
business as loan. He receives interest on such as long as the loan is not paid
off.
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33. Which of the following statements pertains to substituted limited partner?
a. He is one who decided to leave the partnership after reaching the age of
retirement.
b. He is a partner who is admitted to an existing partnership and who is liable as
a limited partner to existing liabilities of partnership before his admission and
who is liable as a general partner to new liabilities of the partnership after his
admission.
c. He is a person admitted to all the rights of a limited partner who has died or
has assigned his interest in a partnership
34. How shall the profits and losses of the partnership be distributed among the
partners?
a. It should be divided equally.
b. It should be divided according to their profits and losses sharing agreement.
c. It should be divided proportionately in accordance to the capital contribution.
35. In the absence of agreement as to the sharing of profits, how shall industrial
partner share with it?
a. The industrial partner shall share on the basis of loss agreement ratio.
b. The industrial partner shall receive an equal share in profit.
c. The industrial partner shall receive the lowest share received by a capitalist
partner.
d. The industrial partner shall first receive a just and equitable share in the
profits before distribution to capitalist partners.
36. In the absence of agreement as to the sharing of profits, how shall the remaining
profits after distribution to industrial partners of his just and reasonable share in
profits be distributed to the capitalist partners?
b. It should be divided according to loss sharing agreement.
c. It should be divided proportionately in accordance to the capital contribution
ratio.
37. In the absence of agreement as to the sharing of profits, how shall a capitalist-
industrial partner share in partnership profits?
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a. He shall share on the basis of loss agreement ratio.
b. He shall receive an equal share in profit.
c. He shall receive the lowest share received by a capitalist partner.
d. He shall receive a just and equitable share in the profit for being an industrial
partner and then he shall also share in the remaining profits as a capitalist
partner on the basis of capital contribution ratio.
38. In the absence of agreement as to the sharing of losses, how shall industrial
partner share with it?
a. The industrial partner shall not share in the losses.
b. The losses shall share on the basis of profit agreement ratio.
c. The industrial partner shall receive the lowest share received by a capitalist
partner.
d. The industrial partner shall first receive a just and equitable share in the
losses.
39. In the absence of agreement as to the sharing of losses, how shall the losses be
distributed to capitalist partners?
b. It should be divided in accordance with the profit agreement.
ratio.
40. In the absence of agreement as to the sharing of profits and losses, how shall the
losses be distributed to capitalist partners?
b. It should be divided in accordance with time spent in working for the
partnership.
ratio.
41. In the absence of agreement as to the sharing of losses, how shall a capitalist-
industrial partner share in partnership losses?
a. He shall share on the basis of profit agreement ratio.
b. He shall receive an equal share in losses.
c. He shall receive the lowest share received by a capitalist partner.
d. For being an industrial partner, he shall not share in losses but for being
capitalist partner he shall share in the losses on the basis of profit ratio.
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42. Which of the following stipulations in the sharing of profit or losses is valid?
a. A stipulation excluding a capitalist partner in the share of profits.
b. A stipulation excluding a capitalist partner in the share of losses.
c. A stipulation excluding an industrial partner in the share of profits.
d. A stipulation excluding an industrial partner in the share of losses.
43. C and I entered into a contract of partnership for a fixed term of two years. C, a
capitalist partner and I, an industrial partner agreed with the following profit or
loss sharing terms. I will share equally in the profit and there is no agreement as
to losses. On 2010, the partnership had P10,000 net loss. On 2011, the
partnership had P20,000 net income. Upon examination of the contract, it was
determined that the word profit is really intended by the partners as cumulative
profit. How much shall be received by I as his share for the two years of
partnership operation?
a. P10,000 because industrial partner do not share in the losses.
b. P5.000 because the year-2010 P10,000 net loss shall be netted from year-
2011 P20,000 net income before distribution.
c. Zero because industrial partner has no investment.
d. P20,000 because he is an industrial partner.
44. The following statements concerning the designation of share in the profits and
losses by a third person or by a partner are correct, except
a. If entrusted by the partners to a third person, it is binding upon the partners
and may be impugned only when it is manifestly inequitable.
b. If the designation by a third person is manifestly inequitable, it can no longer
be impugned by a partner who has begun to execute it.
c. If the designation by a third person is manifestly inequitable, it can no longer
be impugned by any partner if three months had already lapsed from the time
he obtained knowledge thereof.
d. If entrusted to one of the partners, the designation is valid.
45. What is the prescriptive period for a partner to file an action to impugn or
question the manifestly inequitable sharing of partnership profits or losses
designated by a third person?
a. Within 3 months from the knowledge of such designation but it must be before
the said partner executes it.
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b. Within 2 months from the knowledge of such designation but it must be before
the said partner executes
c. Within 1 month from the knowledge of such designation but it must be before
d. Within 6 months from the knowledge of such designation but it must be before
46. When a partner has been appointed manager in the articles of co-partnership,
the following are the rules of partnership management to be observed, except
a. The managing partner may execute all acts of administration despite the
opposition of his partners unless he acts in bad faith.
b. With just or lawful cause or if the managing partner acts in bad faith, the
revocation of the power of the managing partner can be made by the vote of
the partners representing the controlling interest.
c. Without just or lawful cause or if the managing partner acts in good faith, the
revocation of the power of the managing partner can be made only with the
consent of all the partners including the managing partner.
d. The managing partner's decision on acts of administration may be reversed
by the vote of majority of the partners.
47. When a partner has been appointed manager after the partnership has been
constituted or has been appointed in a separate document other than articles
of co-partnership, the following are the rules of partnership management to be
observed, except
a. The managing partner may execute all acts of administration.
b. In case of opposition to the decision of the managing partner on acts of
administration, the partners representing the controlling interest may resort to
voting for his removal as manager.
c. He may be removed with just cause by the vote of the partners representing
the controlling interest.
d. He can only be removed without just cause by the vote of all partners
including the managing partner
48. The following are the rules of partnership management when two or more
partners have been appointed as managers, except
a. When there is a specification of their respective duties, each managing
partner shall perform only the duties specified in his appointment.
b. When there is no specification of their respective duties or there is no
stipulation that one shall not act without the consent of the others, each one
may separately execute all acts of administration.
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c. When there is no specification of their respective duties or there is no
stipulation that one shall not act without the consent of the others, the
decision of the majority of the managing partners shall prevail in case of
opposition.
d. When there is no specification of their respective duties or there is no
stipulation that one shall not act without the consent of the others, the
decision of partner owning the controlling interest shall prevail in case of tie in
voting.
e. When there is a stipulation that none of the managing partners shall act
without the consent of the others, the vote of the majority of managing
partners shall be sufficient for the validity of the acts.
49. In case it should have been stipulated that none of the managing partners shall
administratively act without the consent of the others, the concurrence of all
managing partners shall be necessary for the validity of the administrative act.
When may the present managing partners administratively act validly by alleging
the absence or disability of the other managing partners?
a. When the present partners represent the majority of the partnership.
b. When the present partners represent the controlling interest in the
partnership.
c. When there is imminent danger of grave or irreparable injury to the
partnership.
50. When the manner of management has not been agreed upon, the following are
the rules of partnership management to be observed, except
a. All the partners shall be considered agents of the partnership or all of them
are managers.
b. Whatever any of the partners may do alone shall bind the partnership.
c. In case of opposition of the other partners, the decision of the majority shall
prevail and the decision of the partners owning the controlling interest shall
prevail in case of tie.
d. Any of the partners may make any important alteration in the immovable
property of the partnership without the consent of the others if it may be
useful to the partnership.
51. Which of the following partners is not allowed to participate in the management of
a partnership?
a. Capitalist partner
b. Industrial partner
c. Nominal partner
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d. Managing partner
52. The following acts of a partner binds the partnership, except

a. Any act of a partner for the purpose of the partnership business.
b. Any act of a partner including the execution in the partnership name of any
instrument, for apparently carrying on in the usual way the business of the
partnership of which he is a member.
c. Any act of a partner which is not apparently for the carrying on of business of
the partnership in the usual way but authorized by the other partners.
d. Any act of a partner who has in fact no authority to act for the partnership in
the particular matter, and the person with whom he is dealing has knowledge
of the fact that he has no such authority.
53. In which of the following instances shall the partnership be bound by the acts of
the partners?
I. If the partner is authorized to act for the partnership whether or not the act is
for apparently carrying on in the usual way the business of the partnership.
II. If the partner is not authorized to act for the partnership but the act is for
apparently carrying on in the usual way the business of the partnership and
the third person has no knowledge of the partner's lack of authority.
III. When although the act is for the apparently carrying on in the usual way the
business of the partnership, the partner is not authorized to act for the
partnership and the third person has knowledge of the partner's lack of
authority.
IV. When the partner is not authorized to act for the partnership and the act is not
for apparently carrying on in the usual way the business of the partnership
whether or not the third person has knowledge of the partner's lack of
authority.
V. Any act in contravention of a restriction on authority of a partner to persons
having knowledge of the restriction.
a. I and II
b. III and IV
c. I and III
d. II and IV
54. The following acts are not considered administrative acts or acts for apparently
carrying on in the usual way of business of the partnership and may not be
performed by a single partner without authorization from all the other partners or
these are acts which require unanimous vote of the partners because they are
considered acts of strict ownership or dominion, except
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a. Assignment of partnership property in trust for creditors or on the assignee's
promise to pay the debts of the partnership.
b. Disposition of the goodwill of the business.
c. Acts which would make it impossible to carry on the ordinary business of the
partnership.
d. Confession of judgment.
e. Entering into a compromise concerning a partnership's claim or liability.
f. Submission of a partnership claim or liability to arbitration.
g. Renunciation of a claim of the partnership.
h. Payment of the salary of partnership's employees.
55. Which of the following acts is considered an act of administration that may be
done by the managing partner alone?
a. Disposition of the goodwill of the business of the partnership.
b. Selection of the major supplier of the partnership.
c. Renunciation of a claim of the partnership.
d. Submission of a partnership claim or liability to arbitration.
56. Which of the following statements is true as regards to the right of industrial
partner to engage in another business?
a. An industrial partner is only prohibited to engage in a business of the same
kind but not to business of different kind.
b. An industrial partner cannot engage in any business for himself, unless the
partnership expressly permits him to do so.
c. An industrial partner may engage in business of different kind for himself,
unless the partnership expressly prohibits him to do so.
d. An industrial partner may engage in a business of the same kind for himself,
unless the partnership expressly prohibits him to do so.
57. What is the remedy of the capitalist partner if the industrial partner engages in
business for himself without the express permission of the partnership?
I. Exclude him from the partnership with a right to damages
II. Avail themselves of the benefits obtained from the business he engaged in
with a right to damages
a. Either I or II
b. Neither I nor II
c. I only
d. II only
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58. Which of the following statements is true as regards to the right of capitalist
partner to engage in another business?
a. The capitalist partner cannot engage in any kind of business without permission
of the other partners.
b. The capitalist partner can only engage in a business of different kind if there is
stipulation allowing him to do so.
c. The capitalist partner can engage in a business of the same kind even without
d. The capitalist partner can engage in a business of different kind even without
stipulation allowing him to do so and in a business of the same kind if there is a
59. What are the remedies available to injured partners when a capitalist partner
engages in the same kind of business without stipulation allowing him to engage
in that business?
I. To ask the guilty capitalist partner to bring to the common fund any profits
accruing to him from the said transaction.
II. To ask the guilty capitalist partner to bear all the losses from the said
transaction.
a. I only
b. II only
c. Neither I nor II
d. Both I and II
60. As a general rule, what is the nature of liability of a general partner, whether
capitalist or industrial, for partnerships debts and for the contracts which may be
entered into in the name and for the account of the partnership, under its
signature and by a person authorized to act for the partnership?
a. They shall be liable pro rata and subsidiarily with all their separate property
and after all the partnership assets have been exhausted.
b. They shall be liable solidarily with all their separate property and after all the
partnership assets have been exhausted.
c. They shall be liable equally with all their separate property and after all the
partnership assets have been exhausted.
d. They shall be liable pro rata and directly even the partnership assets have not
been fully exhausted.
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61. The following are the exceptional cases wherein the partnership shall be
solidarily liable with all the partners and wherein all partners are liable solidarily
with the partnership for everything chargeable to the partnership, except
a. For loss or injury caused to a third person or any penalty is incurred by
reason of the wrongful act or omission of any partner acting in the ordinary
course of business of the partnership or with the authority of his co-partners.
b. Where one partner acting within the scope of his apparent authority receives
money or property of a third person and misapplies it.
c. Where the partnership in the course of business receives money or property
of a third person and such money or property is misapplied by any partner
while it is in custody of the partnership.
d. Where the unpaid partnership liabilities pertain to electric and water bills.
62. The following are the rules on sharing of partnership liabilities to third persons as
regards to general partners, whether capitalist or industrial, except
a. The liability of the partnership shall be divided pro-rata among the partners.
b. Each general partner, whether capitalist or industrial, shall be liable with his
separate property after all the assets of the partnership have been exhausted.
c. A stipulation exempting a general partner from pro rata and subsidiary liability
after the exhaustion of partnership asset is valid among the partners.
d. A stipulation exempting a general partner from pro rata and subsidiary liability
after the exhaustion of partnership asset is valid as to third persons.
63. If there is stipulation exempting a general partner from pro rata and subsidiary
liability, the following are the rules to be observed, except
a. The assets of the partnership shall first be used to pay the partnership
liabilities.
b. If the partnership assets are not sufficient, the liability shall be paid pro-rata
from the separate assets of the general partners, including industrial partner.
c. The general partners not exempted from pro rata and subsidiary liability shall
reimburse according to the partner's profit or loss sharing agreement or in the
ratio of their capital contribution, whichever is applicable, the industrial partner
and general partner exempted from pro rata and subsidiary liability.
d. The industrial partner is not required to share in the excess of liability of
partnership over the assets.
64. Which partner is not liable up to the extent of his separate assets for payment of
partnership debts?
a. Industrial partner
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b. Limited partner
c. Managing partner
d. General partner
65. What is the extent of liability of a person admitted as a general partner into an
existing partnership also known as newly-admitted general partner?
a. He is liable for all the obligations of the partnership arising before his
admission as though he had been a partner when such obligations were
incurred, except that this liability shall be satisfied only out of partnership
property, unless there is a stipulation that he is assuming the existing liability
of the partnership. (Limited Partner for Partnership Obligation arising before
his admission)
b. He is liable pro-rata and subsidiarily up to the extent of his separate assets for
all obligations incurred after his admission as a partner. (General Partners for
Partnership Obligation arising after his admission)
c. Both A and B
d. Neither A nor B.
66. In the absence of agreement among the partners, where shall the partnership's
books be kept?
a. At the residence of the managing partner.
b. At the residence of the controlling partner.
c. At the residence of the majority partner.
d. At the principal place of business of the partnership.
67. Which of the following statements concerning the obligations and rights of a
partner is incorrect?
a. Every partner shall at any reasonable hour have access to and may inspect
and copy any of the partnership books.
b. Every partner shall render on demand true and full information of all things
affecting the partnership to any partner or the legal representative of any
deceased partner or of any partner under legal disability.
c. Every partner must account to the partnership for any benefit, and hold as
trustee for it any profits derived by him without the consent of the other
partners from any transaction connected with the formation, conduct, or
liquidation of the partnership or from any use by him of its property.
d. Every capitalist partner can engage for their own account in any operation
which is of the same kind of business in which the partnership is engaged.
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68. Which type of partner is not allowed to engage in a business of different kind of
the partnership business without the express permission of the partnership?
a. Capitalist partner
c. Managing partner
d. All of them
69. The following are the instances wherein any partner shall have the right to a
formal account of the partnership affairs, except
a. If the partner is wrongfully excluded from the partnership business or
possession of its property by his co-partners.
b. If the right for formal accounting is provided under the terms of articles of co-
partnership.
c. If the other partner derived profits without the consent of other partners from
any transaction connected with the formation, conduct, or liquidation of the
partnership or from any use by him of its property.
d. Whenever the circumstances render formal accounting just and reasonable.
e. If a capitalist partner intends to engage in another business which is of
different kind of that of the partnership
70. A partnership shall operate under a firm name, which may or may not include the
name of one or more of the partner. If a third person, not being a member of the
partnership, includes his name in a firm name, what shall be the effect?
a. The third person shall not be liable as a partner.
b. The third person shall be entitled to all rights of a partner.
c. The third person shall be liable pro-rata and subsidiarily and will be treated as
nominal partner.
d. The third person shall be solidary liable with all the partners.
71. In the absence of partnership agreement, when shall the juridical personality of
the partnership begin?
a. From the moment the partners have completed their contributions.
b. From the moment of the execution of the contract of partnership.
c. From the moment of submission with the SEC of the Articles of Co-
Partnership.
d. From the moment the SEC issues the Certificate of Registration
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72. In the absence of stipulation to the contrary, what is the obligation of the partners
as to the contribution of capital?
a. To contribute equally to the capital of the partnership.
b. To ask the court for the amount of contribution.
c. To ask third party to designate the amount of contribution.
d. To contribute in accordance with their respective age ratio.
73. Which of the following statements concerning the obligations of a partner to

deliver a specific thing is incorrect?
a. To deliver to the partnership at the time it was constituted or on the date
stipulated the property he has promised to contribute.
b. To take care of the property before its delivery to the partnership with the
diligence of a good father of a family.
c. To be liable for damages in case of default.
d. To answer for eviction in case the partnership is deprived of the specific or
determinate thing he has contributed to the partnership in the same manner
as the vendor is bound with respect to the vendee.
e. To be liable for the fruits of the thing frorn the time they should have been
delivered with the need of any demand.
74. The following are the obligations of the partners with respect to the contribucion
of money, except
a. To deliver to the partnership at the time it was constituted or on the date
stipulated the money he has promised to contribute.
b. To pay interest on the amount he had promised to contribute from the time he
should have complied with his obligation.
c. To pay damages suffered by the partnership by reason of the default.
d. To answer for eviction.
75. The following are the obligations of the partner with respect to partnership fund
misappropriated, except
a. To reimburse to the partnership the amount that he has taken from the
partnership coffers.
b. To pay interest on the amount he had converted for his own use from the time
of conversion.
c. To pay the damages suffered by the partnership by reason of the conversion.
d. To disclose the misappropriation done to trial court judge for purposes of
conviction.
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76. In the absence of agreement to the contrary, what is the obligation of a partner in
case of imminent loss of the business of the partnership?
a. To contribute additional share of capital to the partnership to save the venture
or to sell his interest to the other partners if he refuses to contribute such
additional capital unless he is an industrial partner or capital partner
exempted by stipulation.
b. To sell his interest to the other partners even if he wants to contribute.
c. To dissolve the partnership.
d. To convert the partnership into a corporation.
77. Who are the partners not required to contribute additional share of capital to the
partnership to save the venture in case of imminent loss of the business of the
partnership?
b. Capitalist partner exempted by agreement
c. Both A and B
d. Neither A nor B
78. The following are obligations of a partner to the partnership, except

a. To bring to the partnership capital his share of a partnership credit which he
has received in whole or in part even he may have given his receipt if the
other partners have not collected their shares and the debtor becomes
insolvent after the partner has received the payment.
b. To pay to the partnership for damages suffered by it through his fault but he
cannot compensate them with the profits and benefits which he may have
earned for the partnership by his industry.
c. To render on demand true and full information of all things affecting the
partnership to any partner, legal representative of any deceased partner or
legal representative of any partner under disability.
d. To account to the partnership for any benefit and hold as trustee for it any
profits, derived by him without the consent of the partners from any
transaction connected with the formation, conduct or liquidation of the
partnership or from use by him of its property.
e. To bear the risk of specific and determinate things owned by the partnership.
79. If the partnership suffered damages through the fault of a partner, which of the
following is correct?
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a. He can compensate his liability to the partnership with the profits and benefits
which he may have earned for the partnership by his industry.
b. The partner guilty of fault will be solely liable to third person.
c. The courts may equitably reduce his responsibility to the partnership if
through the partner's extraordinary efforts in other activities of the partnership,
unusual profits have been realized.
d. The guilty partner shall not reimburse the innocent partners for the damages
suffered.
80. What is the nature of liability of partners for quasi-delict committed by a partner in
the performance of the business of the partnership?
a. Jointly
b. Equally
c. Solidarily
d. Proportionately
81. The partnership shall bear the risk of loss for the following contributions of
partners, except
a. Fungible things or those that cannot be kept without deteriorating.
b. Things contributed to the partnership to be sold.
c. Things brought and appraised in the inventory of partnership unless there is a
stipulation to the contrary but the amount of partnership obligation will be
limited to the value at which they were appraised.
d. Specific and determinate things owned by a partner which are not fungible,
contributed to the partnership so that only their use and fruits may be for the
common benefit such as property brought by partners in case of universal
partnership of profits.
82. The following are the liabilities or obligations of the partnership to the partners,
except
a. The partnership shall be responsible to every partner for the amounts he may
have disbursed on behalf of the partnership and for the corresponding
interest, from the time the expense are made.
b. The partnership shall answer to each partner for the obligations he may have
contracted in good faith in the interest of the partnership business.
c. The partnership shall answer to each partner the risks as a consequence of
its management.
d. The partnership shall answer for the personal liabilities and debts of the
partners.
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83. The following are the rights of a partner in a partnership, except
a. To associate another person with him in his share.
b. To admit another person into the partnership without the consent of all the
partners.
c. To have access to and inspect and copy the partnership books at reasonable
hours.
d. To have formal account of partnership affairs.
84. The following are the property rights of a partner, except

a. His rights in specific partnership property.
b. His interest in the partnership.
c. His right to participate in the management.
d. His right to admit another partner without the consent of other partners.
85. A partner is considered a co-owner with his partners of specific partnership

property Which of the following statements considering the co-ownership
implications is incorrect?
a. A partner has an equal right with his partners to possess specific partnership
property for partnership purposes but he has no right to possess such
property for any other purpose without the consent of his partners.
b. A partner's right in specific partnership property is not assignable except in
connection with the assignment of rights of all the partners in the same
property.
c. A partner’s right in specific partnership property is not subject to attachment
or execution, except on a claim against the partnership.
d. A partner's right in specific partnership property is subject to legal support
under the Family Code.
86. What is the partner's interest in the partnership?

a. It is his share in the profits in the partnership.
b. It is his share in the surplus (net assets) of the partnership.
c. It is his share in both the profits and surplus (net assets) of the partnership.
d. It is his share in the assets of the partnership.
87. The following statements are true as regards to the right of a partner on his
interest in the partnership, except
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a. The partner's interest in the partnership is his share of the profit and surplus
b. The partner may convey or assign his whole interest in the partnership.
c. The partner's interest in the partnership may be attached for his separate or
personal debts subject to the preferential right of partnership creditors.
d. The partner's decision to convey or assign his partner's interest in the
partnership will result to admission of the assignee even without the consent
of other partners.
88. What is the effect if a partner associates or assigns/conveys his share or interest
in the partnership to another person?
a. The associate or assignee becomes a partner of the partnership even without
the consent of the other partners.
b. The associate or assignee becomes a partner of the partnership if the
assigning partner is a managing partner even without the consent of the other
partners
c. The partnership is dissolved by the assignment of the said interest.
d. The associate or assignee does not become a partner but shall be entitled
only to the share of the assigning partner in the partnership profits and net
assets at the date of liquidation.
89. The following are the rights of an assignee of partner's interest, except
a. To receive the profits to which the assigning partner would otherwise be
entitled.
b. To avail himself of the usual remedies in case of fraud in management.
c. In case the partnership is dissolved, he is entitled to receive his assignor's
interest (surplus) and may require an account from the date only of the last
account agreed to by all the partners.
d. To interfere in the management of the business and to inspect partnership
books at a reasonable hours of a business day.
90. In case the partner's interest is attached or charged by a partner's separate or

personal creditor for the payment of his personal debt, who has the right to
redeem the said interest before foreclosure to prevent the dissolution of the
partnership?
a. By any one or more of the partners using their separate property.
b. By any one or more of the partners with the consent of all the partners whose
interest are not so charged or sold using partnership property.
c. Either A or B.
d. Neither A nor B.
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91. The following are the rules for application of payment when a person owes
separate demandable debts to the partnership and to the partner authorized to
receive credit also known as managing partner, except
a. If the partner authorized to receive issues the receipt for the partnership,
payment shall be applied to the partnership credit.
b. If the partner authorized to receive issues his own receipt payment shall be
applied to the partnership's credit or partner's personal credit, proportionately,
c. If the debt to the partnership is not yet due, the payment shall be applied to
the partner's credit in its entirety
d. If the debt owed to the partner is more onerous, the selection by the debtor of
the more onerous debt as to the application of payment shall be followed.
e. If there are separate credits to the partnership or a partner, the payment shall
always be applied to the partnership's credit.
92. If a person owes separate demandable debts to the partnership and to the partner
not authorized to receive credit also known as non-managing partner, how shall the
payment by the debtor be applied?
a. It shall be applied fully to the non-managing partner's receivable.
b. It shall be applied fully to the partnership's receivable.
c. It shall be applied proportionately to both receivables.
d. It shall be applied equally to both receivables.
93. If an existing partnership is sold by the incumbent partners to another person’s,

what is the effect of the sale to the liability of the partnership to the third persons if the
sale is without the consent of the third persons?
a. The previous partners are still liable to the old partnership creditors despite the sale.
b. The new partners will become solely liable to the old partnership creditors even if the
latter did not give consent to the sale.
c. The old partnership creditors can no longer go after the old partners.
d. The previous partners are already free from any partnership liability by reason of the
sale.
94. Where title to real property is in the partnership name, what is the effect of the
conveyance of such property by any partner in the partnership name?
a. The conveyance will transfer title of the real property to the buyer.
b. The partnership can always recover such real property from buyer.
c. The conveyance will bind only the partnership if such partner has special power of
attorney.
d. The conveyance will not transfer title of the real property to the buyer.
95. Where title to real property is in the partnership name, any partner may convey title
to such property by a conveyance executed in the partnership name but the partnership
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may recover such real property. When is the partnership barred from recovering the
said real property?
a. When the conveyance is for apparently carrying on in the usual way the business of
the partnership of which he is a member.
b. When the conveyance was made by the grantee or of a person claiming through such
grantee to a holder for value without knowledge that the partner, in making the
conveyance, has exceeded his authority.
c. Either A or B.
d. Neither A nor B.
96. Where title to real property is in the name of the partnership, what is the effect of the
conveyance executed by a partner in his own name instead in the partnership's name?
a. The conveyance passes the equitable interest of the partnership provided the act is
one within the authority of the partner and for apparently carrying on in the usual way
the business of the partnership of which he is a member.
b. The conveyance passes the equitable interest of the partnership regardless of the
lack of authority of the partner selling the property.
c. The conveyance will pass the equitable interest of the partnership only if the other
partners ratify the sale.
d. The conveyance will pass the equitable interest of the partnership only if the partner
owning the controlling interest will approve the sale.
97. Where title to real property is in the name of one or more but not all the partners,
and the record does not disclose the right of the partnership, what is the effect of
conveyance by the partners in whose name the title stands?
a. The conveyance will transfer title of the property to the buyer.
b. The partnership can never recover such property from the buyer.
e. The partnership can always recover such property from the buyer.
d. The conveyance will never bind the partnership.
98. Where title to real property is in the name of one or more but not all the partners,
and the record does not disclose the right of the partnership, the partnership may not
recover such real property. When may the partnership recover such real property?
a. If the partners' act is not for apparently carrying on in the usual way the business of
the partnership of which he is a member
b. If the purchaser or assignee is a holder for value without knowledge of the lack of
authority of the selling partner.
c. Either A or B.
d. Neither A nor B.
99. Where the title to real property is in the name of one or more or all the partners, or in
a third person in trust for the partnership, what is the effect of the conveyance executed
by a partner in the partnership name, or in his own name?
a. The conveyance passes the equitable interest of the partnership, provided the act is
one within the authority of the partner and for apparently carrying on in the usual way
the business of the partnership of which he is a member.
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b. The conveyance passes the equitable interest of the partnership regardless of the
lack of authority of the partner selling the property.
c. The conveyance will pass the equitable interest of the partnership only if the other
partners ratify the sale.
d. The conveyance will pass the equitable interest of the partnership only if the partner
owning the controlling interest will approve the sale.
100. Where the title to real property is in the name of all the partners, what is the effect
of conveyance executed by all the partners?
a. The conveyance passes all the rights of the partners in said real property.
b. The conveyance passes all the rights of the partners in said real property only if
authorized by the SEC.
c. The conveyance will not bind the partnership if the partnership in reality owns the
property.
d. The conveyance will bind the partnership only if it is for apparently carrying on in the
usual way the business of the partnership of which he is a member.
101. An admission or representation made by any partner concerning partnership affairs

within the scope of his authority is evidence against the partnership. The following are
the requisites in order for an admission or representation of a partner to be used as
evidence against the partnership, except
a The admission or representation must concern partnership affairs.
b. The admission must be in a public instrument.
c. The admission must be made within the scope of the authority of the partner making
the admission.
d. The admission must be made during the existence of the partnership.
102. As a general rule, notice to any partner of any mater relating to partnership affairs
binds the partnership. The following knowledge of a partner binds the partnership,
except
a. The knowledge of a partner acting in the particular matter if he acquires the same
while already a partner.
b. The knowledge of a partner acting on a particular manner if be acquires it before his
admission to the partnership provided the same was still present on his mind.
c. The knowledge of any other partner not Acting on a particular matter if be acquired
the same while already a partner and be could and should have reasonably
communicated the same to the partner acting on a particular matter.
d. Notice or knowledge of a partner in case of fraud committed on or against the
partnership by the partner having notice or knowledge.
103. What is the effect if a person, by words spoken or written or by conduct, represents
himself to specific persons, or consents to another representing him to anyone, as a
partner in an existing partnership or with one or more persons who are not actual
partners?
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a. The nominal partner is liable pro-rata and subsidiarily like a general partner only to
persons to whom such representation has been made, who has, on the faith of such
representation, given credit to the actual or apparent partnership
b. The nominal partner is liable like a limited partner only to persons to whom such
representation has been made, who has, on the faith of such representation, given
credit to the actual or apparent partnership.
c. The nominal partner is not liable as a partner because he does not become a partner
in the partnership.
d. The nominal partner is liable as partner only if the other persons or partners
consented to such representation.
104. What is the effect if a person, by words spoken or written or by conduct, represents
himself in public, or consented in public to another representing him to anyone, as a
partner in an existing partnership or with one or more person’s not actual partners?
a. The nominal partner is liable pro-rata and subsidiarily like a general partner to
persons giving credit only if the representation has been communicated to the latter.
b. The nominal partner is liable like a limited partner to persons giving credit only if the
representation has been communicated to the latter.
c. The nominal partner is liable pro-rata and subsidiarily like a general partner to
persons giving credit whether the representation has or has not been communicated to
the latter.
d. The nominal partner is liable pro-rata and subsidiarily like a general partner to
persons giving credit if the other partners consented to the admission of the nominal
partner.
105. Which of the following statements concerning nominal partner and partnership by
estoppels inure correct?
a. When a person has been thus represented to be a partner in an existing partnership,
or with one or more persons not actual partners, he is an agent of the persons
consenting to such representation to bind them to the same extent and in the same
manner as though he were a partner in fact, with respect to persons who rely upon the
representation.
b. When all the members of the existing partnership consent to the representation, a
partnership act or obligation results; but in all other cases it is the joint act or obligation
of the person acting and the persons consenting to the representation.
e. Both A and B.
d. Neither A nor B.
106 The following are the rules in preference of credits of partnership creditors and
partner's creditors, except
a The partner's personal creditors have preference over the partner's personal assets.
b. The partnership's creditors have preference over the partnership's assets.
c. Partner's separate creditor shall be paid out of the share of the partner owing him if
there is an excess in the partnership's assets over partnership's liabilities.
d. Partnership creditors shall be paid out first using partner's separate assets.
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107. Which of the following assets shall be used first for the payment of partnership's
liabilities?
a. Partnership's property
b. Partner's separate property
c. Partner's conjugal or community property
d. Partner's exclusive property
108. Which of the following statements pertains to partnership dissolution?

a It is the change in the relation of the partners caused by any partner ceasing to be
associated in the carrying on of the business.
b. It is the process of settling the disputes or affairs of the partnership after dissolution
or winding up of the partnership business.
c. It refers to the point when all the business or affairs of the partnership are completely
wound up.
109. The following are the causes of dissolution of a partnership without violation of the
agreement of the partner, except
a. By the termination of the definite term or particular undertaking specified in the
agreement.
b. By the express will of all the partners who have not assigned their Interests or
suffered them to be charged for their separate debts, either before or after the
termination of any specified term or undertaking.
c. By the express will of any partner who acts in bad faith when no definite term or
particular undertaking is specified.
d. By the expulsion of any partner bona fide or in good faith from the business in
accordance with such power conferred by the agreement of the parties.
110. When a partnership for a fixed term or particular undertaking is continued after the
termination of such term or particular undertaking without any express agreement, what
shall give the rights and duties of the partners?
a. The rights and duties of the partners remain the same as they were at such
termination, so far as they are consistent with a partnership at will.
b. The partnership shall be liquidated because there is dissolution of the partnership.
c. The partnership shall not be continued.
d. The partnership shall be governed by the rules on co-ownership.
111. The following are the automatic cases of dissolution of general partnership even
without a need of court order, except
L In contravention of the agreement between the partners, by the express will of any
partner at any time such as withdrawing from the partnership.
b When any event makes it unlawful for the business of the partnership to be carried on
or for the members to Carry it on in partnership.
c. Loss before delivery of property where the partner contributed only its use or
enjoyment in a Universal
Partnership of Profits.
d. Loss after delivery of property where the partner contributed only its use or enjoyment
in a Universal Partnership of Profits.
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e Loss before delivery of specific thing, which a partner has promised to contribute to
the Universal Partnership of All Present Property.
f. Loss after delivery of specific thing which a partner has promised to contribute to the
Universal Partnership of All Present Property
g. By the death of any partner.
h. By the insolvency of any partner
i By the insolvency of the partnership.
j. By the civil interdiction of any partner,
112. The following are the instances wherein a general partnership may be dissolved by
a decree of court upon application by a partner also known as non-automatic causes of
dissolution, except
a. A partner has been declared insane in any judicial proceeding or is shown to be of
unsound mind.
b. A partner becomes in any way incapable of performing his part in the partnership
contract.
c. A partner has been guilty of such conduct as tend to affect prejudicially the carrying
on of the business.
d. A partner willfully or persistently commits a breach of the partnership contracts
e. The business of the partnership can be carried only at a loss.
f. Other circumstances that render a dissolution equitable.
g. Death of any partner.
113. What are the instances when the partnership may be dissolved by a decree of
court upon the application of the assignee or purchaser of a partner's interest?
a. After the termination of the specified term or particular undertaking.
b. At any time if the partnership was a partnership at will when the interest was assigned
or when the charging order was issued.
c. Either A or B.
d. Neither A nor B.
114. The following are the instances when the act of a partner after dissolution binds the
partnership to the third persons and the partners shall be pro-rata and subsidiarily liable,
except
a. When the act is necessary for winding up of partnership affairs.
b When the act is necessary to complete partnership transactions begun but not
finished before dissolution.
c. If the other party to a new transaction and extended credit to the partnership before
dissolution and he had no knowledge of dissolution.
d. If the other party to the new transaction even though not extending credit but
nevertheless known of the partnership before dissolution, and having no knowledge of
dissolution because the fact of dissolution had not been advertised in a newspaper of
general circulation in the place at which the partnership business is regularly carried on.
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e. By any transaction which is not for the usual carrying on of the partnership affairs and
the acting partner has no authority.
115. For acts enumerated in the preceding number which would make the partners
liable pro-rata and subsidiarily, when may a partner be liable pro-rata but not
subsidiarily, meaning, up to the extent of partnership's assets only?
a When such partner is unknown as a partner to the person with whom the contract is
made.
b. When such partner is so far unknown and inactive in partnership affairs that the
business reputation of the partnership could not be said to have been in any degree due
to his connection with it.
c. Both A and B.
d. Neither A nor B.
116. With respect to the partners themselves alone, when will dissolution terminates all
authority of any partner to act for the partnership?
a. When the cause of dissolution is not by the act, insolvency or death of a partner.
b. When the cause of dissolution is by the act, insolvency or death of a partner, the
person acting had knowledge of dissolution, death or insolvency of a partner.
c. Either A or B.
d. Neither A nor B.
117. What is the nature of responsibility of the general partners to third persons for any
liability created by any partner acting for the partnership after dissolution where
dissolution is caused by the act, death or insolvency of a partner if the acting partner
has no knowledge of the dissolution, death or insolvency?
a. They shall be liable pro-rata and subsidiarily for the obligation created after the
dissolution.
b. They shall not be liable.
C. They shall be liable solidarily and subsidiarily for the obligation created after the
dissolution.
d. They shall be liable pro-rata but limited only up to the extent of capital contribution.
118. The following are the instances when the act of a partner after dissolution does not
bind the partnership with third persons, except
a. Where the partnership is dissolved because it is unlawful to carry on the business.
b. Where the partner acting has become insolvent.
c. Where the partner had no authority to wind up partnership affairs.
d. Where the act is necessary for winding up partnership affairs.
119. Which of the following statements concerning the dissolution of a partnership is

incorrect?
a. The dissolution of the partnership does not of itself discharge the existing liability of
any partner.
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b. A partner is discharged from any existing liability upon dissolution of the partnership
by an agreement to that effect between himself, the partnership creditor and the person
or partnership continuing the business; and such agreement may be inferred from the
course of dealing between the creditor having knowledge of the dissolution and the
person or partnership continuing the business.
c. The individual property of a deceased partner shall be liable for all obligations of the
partnership incurred while he was a partner, but subject to the prior payment of his
separate debts.
d. The dissolution of the partnership automatically results to the liquidation of the
partnership's affairs.
120. Who shall have the right or authority to liquidate or wind up the partnership affairs?
a. The liquidating partner agreed upon by the partners.
b. The partners who have not wrongfully dissolved the partnership.
c. The legal representative of the last surviving partner, not insolvent
d. Any of the above.
121. When may a partner, his legal representative or assignee ask for liquidation or
winding up of partnership affairs by the court?
a. When there is no agreement as to who shall wind up the partnership affairs.
b. When there is no violation of articles of co-partnership.
c. When said partner violated the articles of co-partnership.
d. When said partner or legal representative or assignee shows valid cause for
liquidation.
122.Without prejudice to other remedies and rights available under the law, where a
partnership contract is rescinded on the ground of the fraud or misrepresentation of one
of the parties thereto, the party entitled to rescind is entitled to the following rights,
except
a. To a lien on, or right of retention of, the surplus of the partnership property after
satisfying the partnership liabilities to third persons for any sum of money paid by him
for the purchase of an interest in the partnership and for any capital or advances
contributed by him;
b. To stand, after all liabilities to third persons have been satisfied, in the place of the
creditors of the partnership for any payments made by him in respect of the partnership
liabilities;
c. To be indemnified by the person guilty of the fraud or making the representation
against all debts and liabilities of the partnership.
d. To be exempted from pro-rata and subsidiary liability to third persons.
123. In the liquidation of the general partnership, indicate the proper order of payment of
partnership liabilities and equity.
I. Those owing to the creditors other than partners.
II. Those owing to partners other than for capital and profits.
III. Those owing to partners in respect of capital.
IV. Those owing to partners in respect of profits.
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a I-II-III-IV
b. I-II-IV-III
с. II-I-III-IV
d. II-I-IV- III
124. Indicate the property order on priority of claims against the separate property of a
partner who is insolvent or whose estate is insolvent.
L. Those owing to separate creditors.
II. Those owing to partnership creditors.
III. Those owing to partners by way of contribution.
a. I-II-III
b. II-I-III
c. III-II-I
d. I-III-II
125. Indicate the proper order of payment of liabilities of limited partnership in

liquidation.
L. Those to creditors, including limited partners.
II. Those to limited partners by way of their share of the profits and other compensation
by way of income on their contribution.
II. Those to limited partners in respect to the capital or their contributions.
IV, Those to general partners other than for capital and profits.
V. Those to general partners in respect to profits.
VI. Those to general partners in respect to capital.
a I-II-III-IV-V-VI
b. I-II-IV-III-V-VI
c I-II-III-IV-VI-V
d I-II-IV-III-VI-V
126. In the following cases creditors of the dissolved partnership are also creditors of
the person or partnership continuing the business, except
a. When any new partner is admitted into an existing partnership, or when any partner
retires and assigns or the representative of the deceased partner assigns) his rights in
partnership property to two or more of the partners, or to one or more of the partners
and one or more third persons, if the business is continued without liquidation of the
partnership affairs;
b. When all but one partner retire and assign (or the representative of a deceased
partner assigns) their rights in partnership property to the remaining partner, who
continues the business without liquidation of partnership affairs, either alone or with
others;
c. When any partner retires or dies and the business of the dissolved partnership is
continued as set forth in letter a and b of this article, with the consent of the retired
partners or the representative of the deceased partner, but without any assignment of
his right in partnership property,
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d. When all the partners or their representatives assign their rights in partnership
property to one or more third persons who promise to pay the debts and who continue
the business of the dissolved partnership;
e. When any partner wrongfully causes a dissolution and the remaining partners
continue the business under the provisions of article 1837, second paragraph, No. 2,
either alone or with others, and without liquidation of the partnership affairs;
f. When a partner is expelled and the remaining partners continue the business either
alone or with others without liquidation of the partnership affairs.
g When the new partnership discontinues the business of the old partnership and
liquidate it.
127. In the absence of stipulation to the contrary, what is the nature of liability of a third
person becoming a partner in the partnership continuing the business of the dissolved
partnership?
a For creditors prior to dissolution, his liability is only pro-rata but not subsidiarily but
when it comes to creditors of the new partnership, his liability shall be pro-rata and
subsidiarily.
b. His liability shall be pro-rata and subsidiarily to all creditors either before or after the
dissolution.
c. His liability shall be solidary and subsidiarily to all creditors either before or after the
dissolution.
d. His liability is pro-rata but nọt subsidiarily to all creditors either before or after the
dissolution.
128. In case of dissolution of partnership which resulted to continuance of partnership

business, what is the effect on the nature of liability of the deceased partner by the use
by the person or partnership continuing the business of the partnership name, or the
name of a deceased partner as part thereof?
a. It shall make the individual or separate property of the deceased partner liable pro-
rata and subsidiarily for any debts contracted by such person or partnership in the new
partnership.
b. It shall make the individual or separate property of the deceased partner liable
solidarily and subsidiarily for any debts contracted by such person or partnership in the
new partnership.
c. It shall make the individual or separate property of the deceased partner liable pro-
rata but not subsidiarily for any debts contracted by such person or partnership in the
new partnership.
d. It shall not of itself make the individual property of the deceased partner liable for any
debts contracted by such person or partnership in the new partnership.
129. In the absence of agreement to the contrary, when shall the right to an account of
his interest accrue to any partner, or his legal representative as against the winding up
partners or the surviving partners or the person or partnership continuing the business?
a. At the date of the start of operation of the new business.
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Ь. At the date of dissolution.
c. 3 months from the date of dissolution.
d. 1 month from the date of dissolution.
130. What is the minimum composition in a limited partnership?

a. At least one nominal partner and at least one general partner
b. All must be limited partners.
c. At least one limited partner and at least one general partner
d. All must be general partners.
131. He is a partner in a limited partnership who is liable for partnership's debts up to

the extent of his separate assets after the exhaustion of limited partnership's assets.
a. Limited partner
b. General partner
C. Silent partner
d. Dormant partner
132. He is a partner in a limited partnership who is liable for partnership's debts up to

the extent of his capital contribution only.
a Limited partner
b. General partner
c. Nominal partner
d. Managing partner
133. What is the effect if there is no substantial compliance with the registration of
certificate of limited co-partnership with the SEC?
a. The partnership contract is null and void.
b. The limited partnership exists.
c. The partnership will be considered a general partnership as to third persons but
continue to be a limited partnership among the partners.
134. Which of the following may not be contributed by a pure limited partner?
a. Cash
b. Personal property
c Real property
d. Services, industry or labor
135. As a general rule, the surname of a limited partner shall not appear in the limited
partnership name. When may the limited partner's name appear in the partnership
name without increasing the liability of such limited partner to a general partner?
a. If the name of limited partner is also the surname of a general partner.
b. If prior to the time when the limited partner became such, the business has been
carried on under a name in which his surname appeared.
c. Either A or B.
d. Neither A nor B.
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136. What is the effect if a limited partner's name appears in the limited partnership
name contrary to allowed instances provided by law?
a.The limited partner is liable pro-rata and subsidiarily to partnership creditors who
extend credit to the partnership without actual knowledge that he is not a general
partner.
b. The limited partner is liable pro-rata but not subsidiarily to partnership creditors who
partner.
c.The limited partner is liable solidarily and subsidiarily to partnership creditors who
partner.
d. The limited partner is liable pro-rata and subsidiarily to all partnership creditors
regardless of the actual knowledge that he is not a general partner.
137. When may a limited partner be liable pro-rata and subsidiarily like a general
partner to the partnership creditors?
a If he allows his name to be included in the partnership name contrary to allowed
instances of law.
b. If he takes part in the control or management of the business.
e. Either A or B.
d. Neither A nor B.
138. A general partner shall have all the rights and powers and be subject to all the
restrictions and liabilities of a partner in a partnership without limited partners. However,
the following acts can only be made by a general partner if there is written consent or
ratification by all the limited partners, except
a Do any act in contravention of the certificate of limited co-partnership
b. Do any act which would make it impossible to carry on the ordinary business of the
partnership
c. Confess a judgment against the partnership
d. Possess partnership property, or assign their rights in specific partnership property,
for other than a partnership purpose
e. Admit a person as a general partner
f. Admit a person as a limited partner, unless the right so to do is given in the certificate
of limited co- partnership
g. Continue the business with partnership property on the death, retirement, insanity,
civil interdiction or insolvency of a general partner, unless the right so to do is given in
the certificate
h. Acts of administration
139. A limited partner shall have the following rights enjoyed by a general partner,
except
a. Have the partnership books kept at the principal place of business of the partnership,
and at a reasonable hour to inspect and copy any of them;
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b. Have on demand true and full information of all things affecting the partnership, and a
formal account of partnership affairs whenever circumstances render it just and
reasonable; and
c. Have dissolution and winding up by decree of court.
d. Have the power to participate in the control and management of the partnership
business.
140. When a person contributed a capital to a business conducted by a person or

partnership erroneously believing that he has become a limited partner in a limited
partnership, what will be the nature of his liability to third person if he exercises the
rights of a limited partner?
a. He is always liable like a general partner with that partnership.
b. He will not be liable as a general partner with that partnership if upon ascertainment
of the mistake he promptly renounces his interest in the profits of the business, or other
compensation by way of income.
c. He will not be liable as general partner in all instances.
d. He will not be liable like a limited partner.
141. Which of the following statements concerning limited partnership is incorrect?

a. A person may be a general partner and a limited partner in the same partnership at
the same time, provided that this fact shall be stated in the certificate of limited co-
partnership.
b. A person who is a general, and also at the same time a limited partner, shall have all
the rights and powers and be subject to all the restrictions of a general partner, except
that, in respect to his contribution, be shall have the rights against the other members
which he would have had if he were not also a general partner.
c. A limited partner also may loan money to and transact other business with the
partnership, and, unless be is also a general partner, receive on account of resulting
claims against the partnership, with general creditors, a pro rata share of the assets.
d. A limited partner who has made a loan to the partnership may receive or bold as
collateral security any partnership property for his claim to the partnership or receive
from a general partner or the partnership any payment, conveyance, or release from
liability if at the time the assets of the partnership are not sufficient to discharge
partnership liabilities to persons not claiming as general or limited partners.
142. What is the status of the contract of security when a limited partner who has made
a loan to the partnership receive or hold as collateral security any partnership property
for his claim to the partnership?
a.Voidable
b. Rescissible
c. Unenforceable
d. Null and Void
143. Where there are several limited partners the members nay agree that one or more
of the limited partners shall have a priority over other limited partners as to the return of
their contributions, as to their compensation by way of income, or as to any other
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matter. What is the formality required by law for this agreement lo be binding among the
partners?
a It shall be stated in the certificate of limited co-partnership.
b. The agreement must be notarized.
c. The agreement must be in writing
d. The agreement must registered in the Registry of Property.
144. What is the proper classification of an industrial partner in a limited partnership?

a. General partner
b. Limited partner
e. Either general partner or limited partner
d. Nominal partner
145. What is the requirement or precondition before a limited partner may receive from
the partnership the share of the profits or the compensation by way of income stipulated
for in the certificate of limited co- partnership during the lifetime of the partnership?
a. There is net income during the period although successive net loss in prior periods.
b. The partnership's total assets are in excess of the partnership's total liabilities to third
persons.
e. There is net loss during the period.
d. The partnership's total liabilities to third persons are more than the total partnership's
assets.
146. What are the essential requisites before a limited partner may receive from a
general partner or out of partnership property any part of his capital contribution during
the lifetime of the partnership?
a. All liabilities of the partnership, except liabilities to general partners and to limited
partners on account of their contributions, have been paid or there remains property of
the partnership sufficient to pay them;
b. The consent of all members is had, unless the return of the contribution may be
rightfully demanded under the provisions of the second paragraph; and
c. The certificate is cancelled or so amended as to set forth the withdrawal or reduction.
d. All of the above.
147. When may the limited partner demand from the partnership the return of his capital
contribution?
a. On the dissolution of a partnership
b. When the date specified in the certificate for its return has arrived
c Afler he has six months' notice in writing to all other members, if no time is specified.
148. In the absence of any statement in the certificate to the contrary or the consent of
all members, what form of return of capital contributed should be received by a limited
partner?
a He has the right to demand and receive cash in return for his contribution irrespective
of the property contributed.
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b. He has the right to demand and receive particular property contributed in return for
his contribution.
c. He has the right to demand and receive inventory in return for his contribution
irrespective of the property contributed.
d. He has the right to demand and receive land in return for his contribution irrespective
of the property contributed.
149. When may a limited partner demand the dissolution of the partnership and its
subsequent winding up of partnership affairs?
a. When he rightfully but unsuccessfully demands the return of his contribution.
b. When other liabilities of the partnership have not been paid, or the partnership
property is insufficient for their payment, and the limited partner would otherwise be
entitled to the return of his contribution.
C. Either A or B.
d. Neither A nor B.
150. What are the liabilities of a limited partner to the partnership?

a. He is liable for the difference between his contribution as actually made and that
stated in the certificate as having been made
b. He is liable for any unpaid contribution which he agreed in the certificate to make in
the future at the time and on the conditions stated in the certificate.
c. Both A and B.
d. Neither A nor B.
151. What is the nature of limited partner's interest?

a Assignable
b. Waivable
C. Non-transferrable
d. Irreplaceable
152. What is the term used to the person admitted to all the rights of a limited partner
who has died or has assigned his interest in a partnership?
a. Assignee of limited partner
b. Transferee of limited partner
c. Trustee of limited partner
d. Substituted limited partner
153. What is the right of an assignee of a limited partner who does not become a
substituted limited partner?
a. He has a right to require any information or account of the partnership transactions.
b. He has a right to inspect the partnership books.
c. He has a right to manage and control the partnership.
d. He is only entitled to receive the share of the profits or other compensation by way of
income, or the return of his contribution, to which his assignor would otherwise be
entitled.
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154. What are the instances when an assignee of a limited partner may become a
substituted limited partner?
a. If all the members of the partnership consent thereto.
b. If the assigning limited partner or assignor is empowered to admit the assignee as
substituted limited partner as provided in the certificate of limited co-partnership and
gives the assignee that right.
c. When the articles of certificate of co-partnership is appropriately amended in
accordance with law,
155. Which of the following statements concerning the substitution of assignee as

substituted limited partner is incorrect?
a.The substituted limited partner has all the rights and powers, and is subject to all the
restrictions and liabilities of his assignor
b. The substituted limited partner is liable to liabilities of which he was ignorant at the
time he became limited partner and which could not be ascertained from the certificate
c. The substitution of the assignee as a limited partner does not release the assignor
from liability to the partnership under certificate of limited co-partnership.
d. On the death of a limited partner his executor or administrator shall have all the rights
of a limited partner for the purpose of setting his estate, and such power as the
deceased had to constitute his assignee a substituted limited partner.
156. When is the certificate of limited co-partnership required to be cancelled?

a When the partnership is dissolved.
b. When all limited partners cease to be such.
c. Either A or B.
d. Neither A nor B.
157. The following are the instances when certificate of limited co-partnership may be
amended only but not cancelled, except
a. There is a change in the name of the partnership or in the amount or character of the
contribution of any limited partner
b. A person is substituted as a limited partner
An additional limited partner is admitted
d. A person is admitted as a general partner
e. A general partner retires, dies, becomes insolvent or insane, or is sentenced to civil
interdiction and the business is continued under article 1860
f There is a change in the character of the business of the partnership
g. There is a false or erroneous statement in the certificate
h. There is a change in the time as stated in the certificate for the dissolution of the
partnership or for the return of a contribution
i. A time is fixed for the dissolution of the partnership, or the return of a contribution, no
time having been specified in the certificate
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j. The members desire to make a change in any other statement in the certificate in
order that it shalt accurately represent the agreement among them
k. When all limited partners die
158. Which of the following statements concerning a limited partnership is incorrect?

a. Additional limited partners may be admitted after the formation by filing an
amendment to the original certificate without dissolving the limited partnership.
b. The retirement, death, civil interdiction, insanity or insolvency of a general partner
dissolves the limited partnership unless the business is continued by the remaining
general partners under a right to do so in articles of partnership or with the consent of all
members.
c. An industrial partner may become a general partner but is not allowed to become a
limited partner
d. The retirement, death, civil interdiction, insanity or insolvency of a limited partner
always dissolves the limited partnership.
159. The following are the differences of a general partnership from a private
corporation, except
a. General partnership is created by mere consent while a private corporation is created
by operation of law.
b. General partners are generally liable up to the extent of their separate properties
while stockholders are generally liable only up to the extent of their capital contribution.
c. General partnership is generally managed by the partners themselves while Private
Corporation is managed by the Board of Directors.
d. Dissolution of a general partnership is a change in the relationship among the
partners while dissolution of a private corporation is the end of the life of a corporation.
e. General partnership has no right of succession while private corporation has right of
succession.
f. General partnership has no separate personality from the partners while Private
Corporation has a separate personality distinct from the shareholders.
160. Which of the following has no right to inspect the partnership books?
a. Nominal partner
b. Silent partner
c. Secret partner
d. Dormant partner
161. What is the proper classification of an industrial partner?

a. General partner
b. Limited partner
c. Dormant partner
d. Nominal partner
162. Which of the following is not considered a partner?

a. Assignee of a partner
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b. Substituted limited partner
c. Silent partner
d. Secret partner
163. Which of the following partners may be validly removed by virtue of provisions of
Civil Code for engaging in another business without the permission of the other
partners?
a. Managing partner
c. Capitalist partner
d. Silent partner
164. Which managing partner may be validly removed by partners having controlling
interests despite the absence of valid cause for removal?
a.Managing partner appointed in articles of co-partnership
b Managing partner appointed in a separate document other than articles of co-
partnership
c. Either A or B
d. Neither A nor B
165. How is a contract of partnership wherein the contribution involves personal

property with value of at least P3,000 perfected?
a. By mere consent
b. By delivery of the contribution
c. By notarization of the articles of co-partnership
d. By registration of the notarized articles of co-partnership to SEC
166. Which of the following causes is not an automatic ground for dissolution of general
partnership?
a. Death of a partner
b. Insolvency of a partner
c. Civil interdiction of a partner
d. Insanity of a partner
167. Which partner is exempted from making additional capital contribution to the
partnership in order to save the venture from imminent loss?
b. Managing partier
c. Silent partner
d. Secret partner
168. If no one is appointed as managing partner, who shall be considered the

administrator of the partnership?
a. The oldest partner
b. The partner with the largest capital contribution
c. The industrial partner
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d. All the partners
169. In case more than one partner is appointed as managing partners, how shall act of
management be settled in case of objection by any of the managing partners?
a. The decision of majority of the managing partners shall prevail.
b. The decision of the controlling partners shall prevail.
c. The decision of the controlling managing partners shall prevail.
d. The decision of the oldest partner shall prevail.
170. A, B and C are partners in TEN General Partnership. A and B are capitalist
partners while C is an industrial partner. After exhaustion of partnership assets,
partnership liabilities amounting to P30,000 remained unpaid. Among the partners, from
whom may the partnership creditors collect?
a. C only
b. A, B and C
c. A and B only
d. None of the partners.
171. A, B, C and D are partners in FLX General Partnership. A, B and C are capitalist
partners while D is a industrial partner. The Articles of Co-Partnership provides that C is
exempted from liability of the partnership to third persons. After exhaustion of
partnership assets, partnership liabilities amounting to P60,000 remained unpaid.
Among the partners, who ultimately shoulder the unpaid partnership's liabilities?
a. A and B only
b. A, B and D only
c. A, B, C and D
d. None of the partners
172. A, B and C are partners in ABC Parking General Partnership. D deposited his car
to the parking lot of the partnership for a fee while A Is managing the parking lot. After
seeing D's parked car, B borrowed the said car.
Unfortunately, the car was crushed by an accident. Who will be liable for the value of the
car to D?
a. ABC Partnership only
b. ABC Partnership or B only
c. ABC Partnership or A or B or C
d. ABC Partnership or A or B only
173 A, B and C are partners in AB Ltd. Partnership. A and B are general partners while
C is a limited partner. After exhaustion of partnership assets, partnership liabilities
amounting to P30,000 remained unpaid. Among the partners, from whom may the
partnership creditors collect?
a. C only
b. A, B and C
c. A and B only
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d. None of the partners
174. A, B, C, D, E and F are partners in ABC Lad. Parmership. A, B and F are general
capitalist partners while E is an industrial partner, The Articles of Co-Partnership
provides that F is exempted from liability of the partnership to third persons. C and D
are limited partners but D is appointed as managing partner. Among the partners, who
ultimately shoulder the unpaid partnership's liabilities?
a. A and B only
b. A, B, E and F only
c. A, B and F only
d. A, B, C, D, E and F
175. A and B are general partners in AB Partnership with outstanding liabilities of

P6,000 before the admission of
C. C is admitted to the existing partnership of A and B. After several years of operation,
the total liabilities of the partnership increased to P12,000 while the total assets of the
partnership are fully exhausted. How much may the
unpaid creditor of the partnership validly collect from C?
a P2,000
b. P3,000
c. P4,000
d. P6,000
176. D has two outstanding and matured obligations to ABC Partnership and A,
managing partner of ABC Partnership in the amount of P4,000 and PI,000, respectively.
D paid P1,000 to A who issued his personal receipt. How shall the P1,000 be applied to
the credits?
a PI,000 to A's credit only
b. P1,000 to ABC Partnership's credit only
c. P8O0 to ABC Partnership and P200 to A's credit
d. P500 to ABC Partnership and PS00 to A's credit
177. Using the same data in the preceding number but assuming A issued the receipt of
the partnership, how shall the PI,000 be applied to the credits?
a. P1,000 to A's credit only
b. P1,000 to ABC Partnership's credit only
c. P800 to ABC Partnership and P200 to A's credit
d. P500 to ABC Partnership and P500 to A's credit.
178. D has two outstanding and matured obligations to ABC Partnership and B, a non-
managing partner of ABC Partnership in the amount of P4,000 and PI,000, respectively.
D paid P1,000 to B who issued his personal receipt. How shall the P1,000 be applied to
the credits?
a. PI,000 to B's credit only
b. PI,000 to ABC Partnership's credit only
c. P800 to ABC Partnership and P200 to B's credit
d. P500 to ABC Partnership and P500 to B's credit
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179. Which of the following credits shall be settled last in a general partnership?
a. Those owing to the creditors other than the partners
b. Those owing to partners other than for capital and profits
c. Those owing to partners with respect to capital contribution
d. Those owing to partners with respect to profit share
180. Which of the following credits shall be settled last in a limited partnership?
a Those owing to the limited partners
b. Those owing to the general partners other than for capital and profits
c. Those owing to the general partners with respect to profit share
d. Those owing to the general partners with respect to capital contribution
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CONTRACT OF PARTNERSHIP

1. It is a contract of two or more persons who bind themselves to contribute money,

2. Which partnership is a taxable corporation for purposes of income taxation under

3. The following are the characteristics of a contract of partnership, except

4. The following are the essential requisites of partnership, except

5. When an unlawful partnership is dissolved by a judicial decree, to whom shall

6. Which of the following statements concerning associations and societies, whose

7. The following statements concerning partnership are correct, except

11. A and B orally entered into a contract of partnership whereby A contributed

18. As a general rule, the receipt by a person of a share of the profits of a

27. Which of the following statements pertains to general professional

28. Which of the following statements pertains to partnership at will?

29. Which of the following statements pertains to a general-limited partner?

30. Which of the following statements pertains to a capitalist-industrial partner?

31. Which of the following statements pertains to an ostensible partner?

32. Which of the following statements pertains to dormant partner?

52. The following acts of a partner binds the partnership, except

73. Which of the following statements concerning the obligations of a partner to

78. The following are obligations of a partner to the partnership, except

84. The following are the property rights of a partner, except

85. A partner is considered a co-owner with his partners of specific partnership

86. What is the partner's interest in the partnership?

90. In case the partner's interest is attached or charged by a partner's separate or

93. If an existing partnership is sold by the incumbent partners to another person’s,

101. An admission or representation made by any partner concerning partnership affairs

108. Which of the following statements pertains to partnership dissolution?

119. Which of the following statements concerning the dissolution of a partnership is

125. Indicate the proper order of payment of liabilities of limited partnership in

128. In case of dissolution of partnership which resulted to continuance of partnership

130. What is the minimum composition in a limited partnership?

131. He is a partner in a limited partnership who is liable for partnership's debts up to

132. He is a partner in a limited partnership who is liable for partnership's debts up to

140. When a person contributed a capital to a business conducted by a person or

141. Which of the following statements concerning limited partnership is incorrect?

144. What is the proper classification of an industrial partner in a limited partnership?

150. What are the liabilities of a limited partner to the partnership?

151. What is the nature of limited partner's interest?

155. Which of the following statements concerning the substitution of assignee as

156. When is the certificate of limited co-partnership required to be cancelled?

158. Which of the following statements concerning a limited partnership is incorrect?

161. What is the proper classification of an industrial partner?

162. Which of the following is not considered a partner?

165. How is a contract of partnership wherein the contribution involves personal

168. If no one is appointed as managing partner, who shall be considered the

175. A and B are general partners in AB Partnership with outstanding liabilities of

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