SUBJECT: ACCTG REVIEW – RFBT (ACCTG 421 F)

MIDTERM EXAMINATION

TRUE OR FALSE: (No explanation required)

1. A general partnership may be formed verbally or in writing.
2. An individual must contribute cash to become a partner in a partnership.
3. The partner who has been appointed manager in the articles of partnership may
execute all acts of administration as long as there is no opposition from other
partners.
4. Unlike a corporation, a partnership has a juridical personality separate and distinct
from that of each of the partners.
5. Certified Public Accountants may form a partnership or a corporation for the
exercise of profession.
6. If two or more partners have been entrusted with the management of the
partnership with a stipulation that one of them shall not act without the consent of
all the others, each one may separately execute all acts of administration.
7. A partnership may be formed for the purpose of engaging in the sale of illegal
drugs.
8. If one of the partners contributed P10,000, the contract of partnership must be in a
public instrument and registered with the Securities and Exchange Commission.
9. When the manner of management has not been agreed upon, all the partners are
considered agents of the partnership.
10. In case a parcel of land and commercial building are contributed to the partnership,
the contract is valid as long as it appears in a public instrument.
11. Unless otherwise agreed upon by the partners, a partnership begins from the
moment of the execution of the contract.
12. When the manner of management has not been agreed upon, anyone of the
partners may, without the consent of the others, make any important alteration in
the immovable property of the partnership.
13. A partner who has undertaken to contribute Php 2,000,000.00 but failed to do so
shall be automatically removed from the partnership by operation of law.
14. An industrial partner can engage in any business for himself, whether or not
allowed by the partnership.
15. A partner, on his own, may admit any person into the partnership.

16. In case of an imminent loss of the business of the partnership, a partner cannot
refuse to contribute an additional share to the capital to save the business.
17. A partner shall not be responsible to the partnership for damages suffered by it
through his fault.
18. A capitalist partner can engage in a business different from the business of the
partnership for his own account without the consent of the other partners.
19. The partnership shall not be responsible to every partner for the amounts he may
have disbursed on behalf of the partnership.
20. The partnership shall not answer to each partner for the obligations he may have
contracted in good faith in the interest of the partnership business.
21. If the name of a person who is not a partner is included in the partnership’s name
with his consent, he shall be liable as a partner but without the rights of a partner.
22. The losses and profits of the partnership shall be distributed in the manner agreed
upon by the partners.
23. If only the share of each partner in the profits has been agreed upon, the share of
each in the losses shall be decided by the partner appointed as manager in the
Articles of Partnership.
24. A capitalist partner and an industrial partner are liable to creditors with all their
personal properties after all the partnership assets have been exhausted for the
obligations contracted in the name, and for the account, of the partnership.
25. In the absence of stipulation, the share of each capitalist partner in the profits and
losses shall be in proportion to what he may have contributed but the industrial
partner shall not share in the losses.
26. The partners can appoint a third person to designate the division of their profits
and losses.
27. The agreement that some of the capitalist partners would be exempted from
liability to third persons with respect to the obligations contracted in the name, and
for the account, of the partnership is void even among the partners.
28. The partners can appoint one of them to designate the share of each one in the
profits and losses.
29. The partners may agree to exclude any partner from sharing in the profits and
losses.
30. Limited partners are not liable personally for partnership debts unless he takes part
in the control of the business.