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/ II. Chapter 18: Partnership Operations / Chapter 17-18 Exam - Partnership Formation and Operations (Sept. 15, 2021)

Question 1
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It
is possible for a partner’s capital account to increase as a result of the
allocation of a loss.

Select one:
True

False

Question 2
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Partnerships
are not required to pay any taxes.

Select one:
True

False

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 Question 3
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The fact that

salaries paid to partners are not a component of partnership income is
indicative of

Select one:
a. A departure from
generally accepted accounting principles.

b. Being characteristic
of the proprietary theory.

c. Why partnerships
are characterized by unlimited liability.

d. Being
characteristic of the entity theory.

Clear my choice

Question 4
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Partnership
residual profit and loss percentages have to be (always) the last component
applied in the profit and loss allocation process.

Select one:
True

False

Question 5
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Individuals,
partnerships, and corporations are allowed to be partners in a partnership.

Select one:
True

False

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 Question 6
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On January 2, 2019,
Abel, Cain, and Joshua formed a partnership. Abel contributed cash of
P100,000
and a delivery equipment that originally costs him P120,000, but with a second
hand value of P50,000.  Cain contributed
P160,000 in cash.  Joshua, whose family
sells
office equipment, contributed P50,000 in cash and office equipment that
cost his family’s
dealership P100,000 but with a regular selling price of
P120,000.  In 2019, the partnership
reported net income of P120,000.  On
December 31, 2019, what would be the capital
balance of partners Abel, Cain, and Joshua, respectively?

Select one:
a. Abel, P260,000; Cain, P200,000; Joshua, P190,000 

b. Abel, P257,500; Cain, P200,000; Joshua, P192,500

c. Abel, P187,500; Cain, P200,000; Joshua, P212,500

d. Abel, P190,000; Cain, P200,000; Joshua, P210,000

Clear my choice

Question 7
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Arturo Perez, a
partner in the AP Partnership, has a 30% participation in partnership
profits
and losses. Perez’s capital account has a net decrease of P60,000 during the
calendar year 2019.  During 2019, Perez
withdrew P130,000 (charged against his capital
account) and contributed
property valued at P25,000 to the partnership. 
What was the net
income of the AP Partnership for 2019?

Select one:
a. P233,333

b. P150,000

c. P350,000

d. P550,000

Clear my choice

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 Question 8
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If
a partner is a capitalist/industrialist partner, he gets just and equitable
share as an
industrial partner and another share as a capitalist partner
according to his capital
contribution.

Select one:
True

False

Question 9
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In a limited
partnership,

Select one:
a. All but the general partners
have limited liability

b. All partners have limited liability

c. All but the general partners have unlimited liability

d. The general partners have limited liability

Clear my choice

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 Question 10
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Which of the
following is not a characteristic of a partnership?

Select one:
a. The partnership
itself pays no income taxes.

b. A partnership
requires written Articles of Partnership.

c. It is easy to
form a partnership.

d. Any partner can

be held personally liable for all debts of the business.

Clear my choice

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