Exercises in Contract of Partnership Including Cpa Examination Questions

EXERCISES IN CONTRACT OF PARTNERSHIP INCLUDING CPA EXAMINATION QUESTIONS
TRUE OR FALSE
1. Articles of Universal Partnership entered into specification of its nature is presumed to constitute only
a universal partnership of all profits.
2. The partnership suffered damages in a particular undertaking through the fault of a partner. However,
through the efforts of the partner at fault in other activities, the partnership realized unusual profits. He
can compensate the damages suffered by the partnership through his fault with the unusual profits
earned by the partnership through his industry.
3. One of the partners in a proposed partnership is a multi- millionaire. The stipulation in the contract of
partnership that this partner shall be exempted from sharing in the profits of the partnership is valid.
4. Unless there is a stipulation to the contrary, the partners shall contribute equal shares to the capital
of the partnership.
5. Partners 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.
6. If it becomes apparent that the business of the partnership has become unprofitable and can only be
carried on at a loss, the partnership may be dissolved.
7. The partnership is dissolved when a specific thing which a partner had promised to contribute to the
partnership is lost before its delivery to the partnership.
Exercises in Contract of Partnership

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8. Two or more persons may form a partnership for the exercise of a profession.
9. The surname of a limited partner shall not appear in the partnership name, otherwise he is liable as a
general partner.
10. The receipt by a person of a share of the profits of a business does not of itself establish a
partnership.
11. The sharing of gross returns is prima facie evidence that one is a partner in the business.
12. The partner who has been appointed manager in the Articles of Partnership may exercise all acts of
administration despite the opposition of his partners and his power is irrevocable without just or lawful
cause.
13. The creditors of each partner shall be preferred to those of the partnership as regards the
partnership property.
14. A partnership may be dissolved at any time by any of the partners. T15. An industrial partner is not
entitled to any share in firm capital on dissolution, but is limited to his share in profit as compensation
for his services.
16. A partnership must have a lawful object or purpose, and must be established for the common
benefit or interest of the partners.
17. A partnership may be established for charity.
F18. Articles of Universal Partnership, executed without specification of its nature, constitutes a
universal partnership of all present property.
19. Persons who are prohibited from giving each other any donation or advantage cannot enter into
universal partnership.
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The Law on Partnerships and Private Corporations
20. A partnership begins from the time the partnership contract is registered with the SEC.
21. A capitalist partner cannot engage in business for himself unless the partnership expressly permits
him to do so.
22. The designation of losses and profits may be entrusted to a third person.
23. A partner's right in specific partnership property may be attached and may be executed by his
personal creditors.
24. All partners, including industrial ones, shall be liable pro rata with all their property and after all the
partnership assets have been exhausted, for the payment of the obligations and debts of the
partnership.
25. Any stipulation exempting a general partner, whether capitalist or industrial, from his pro rata
obligation to third persons shall be void, except as among the partners.
26. A person admitted as a partner into an existing partnership is not liable for obligations of the
partnership contracted before his admission.
27. On dissolution the partnership is not terminated, but continues until winding up of partnership
affairs is completed.
28. The designation of losses and profits may be entrusted to one of the partners.
29. A limited partner is not bound by the obligations of the partnership.
30. The general partners may continue, the business of the limited partnership with the partnership
property on the death, retirement, civil interdiction or insolvency of another general partner.
Exercises in Contract of Partnership.

159
31. A person may be a general partner and a limited partner in the same partnership at the same time.
32. The retirement, death, insolvency partner dissolves the limited partnership.
33. The retirement, death, insolvency, insanity general partner dissolves the limited partnership.
34. A general partnership is automatically dissolved by the death, insolvency, insanity or civil interdiction
of a partner.
35. The dissolution of the partnership does not of itself discharge the existing liability of any partner.
36. The contributions of a limited partner may be cash or property of the partner.
37. A stipulation which excludes one or more partners from any share in the profits or losses is void.
38. When the manner of management has not been agreed upon, all the partners shall be considered
agents of the partnership. Thus, any of the partners may, even without the consent of the others, make
important alteration in the immovable property of the partnership.
39. Every partner may associate another person with him in his share, but the associate shall not be
admitted into the partnership without the consent of all the other partners, even if the partner having
an associate should be a manager.
40. An industrial partner cannot engage in business for himself, unless the partnership expressly permits
him to do so.
41. A partnership may enter into another partnership with another person or another partnership.
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42. A partnership has a juridical personality separate and distinct from that of each of the partners.
43. When an unlawful partnership is dissolved by a judicial decree, the capital contributions of the
partners shall be confiscated in favor of the State.
44. When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in
favor of the state.
45. Any judgment creditor of a partner may charge, attach and execute a partner's interest in the
partnership.
46. A partner's right in specific partnership property may be assigned to third persons.
47. The losses and profits shall be distributed in conformity with the agreement. If only the share of each
partner in the profits has been agreed upon, the share of each in the losses shall be in the same
proportion.
48. When the manner of management has not been agreed upon, all the partners shall be considered
agents of the partnership.
49. Every partner shall at any reasonable hour have access to and may inspect and copy the books and
records of the partnership.
F50. Any partner shall have the right to a formal account of the affairs of the partnership at any
reasonable hour on a business day during the existence of the partnership.
51. A partner's interest in the partnership is his share in the profits and losses.
52. A partner's interest in the partnership may be assigned to third
persons.

MULTIPLE CHOICE
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1. A and B are partners engaged in the real estate business. A learned that C was interested in buying a
certain parcel of land owned by the partnership, even for a higher price. Without informing B, A was
able to make B sell to him (A) his (B's) share in the partnership. Then A sold the land at a big profit.
a. A is liable to B for the latter's share in the profit. b. C is liable to B for the latter's share in the profit.
c. The partnership is dissolved when A became the sole owner. d. The sale of the land to C is void since it
was without the knowledge of B.
2. If a partner is insolvent, the first order of preference in the distribution of his assets is:
a. Partner's contribution to the partnership
b. Partnership creditor
c. Separate creditor of the partner
d. Pro-rata between the separate creditors and partnership creditors
3. May contribute money, property or industry to the common fund:
a. Limited partner
b. General partner
C. Both limited and general partners
d. None of them
4. May be required additional contribution in case of imminent loss:
a. Capitalist partner b. Limited partner
c. Industrial partner
d. None of the above
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5. One who takes charge of the winding up of partnership affairs
upon dissolution:
a. Silent partner
b. Liquidating partner
c. Ostensible partner
6. Which of the following may be a cause for involuntary dissolution?
a. Express will of any partner b. Insolvency of any partner Termination of the term.
d. Expulsion of any partner
7. The remedy of capitalist partners against an industrial partner who engaged in a business for himself
without the expressed permission from the partnership is:
a. To compel the industrial partner to sell his interest to the said capitalist partners.
b. To exclude him from sharing in the profits of the partnership. c. To remove him as manager if he is
appointed as manager of the partnership.
d. To expel him from the partnership and claim for damages.
8. A substituted limited partner is:
a. a person admitted as a partner by the other partners.
b. a buyer of right of the deceased partner.
c. An assignee admitted to all the rights of a limited partner.
d. all of the above
9. Management of a partnership is usually conferred upon the:
a. Manager
b. President
c. Partners

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10. Sometimes termed dormant partner:
a. Limited partner
b. Capitalist partner
c. Secret partner
11. Which of the following is not an element of a partnership?
a. There must be a valid contract.
b. There must be a mutual contribution of money, property, or industry to a common fund.
C. There must be an intent to engage in lawful business, trade or profession.
d. The purpose must be to secure profits and to divide the same among the partners.
e. None of the above
12. The receipt by a person of a share of the profits of a business is prima facie evidence that he is a
partner in the business, except where such profits were received in payment:
a. As a debt by installments
b. As wages of an employee or rent to a landlord
C. As an annuity to a widow or representative of a deceased partner
d. As interest on a loan
(e. All of the above
13. Which of the following contracts of partnership need not appear in a public instrument?
Limited partnership
b. Partnership where immovables are contributed
c. Partnership having a capital of P3,000.00 or more
e. All of the above
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14. A partnership which comprises all the profits that the partners may acquire by their work or industry
during the existence of the partnership is called:
a. Universal partnership of all present property
b. Universal partnership of profits
c. Particular partnership
d. Partnership at will
15. A partnership whereby the partners contribute to a common fund all the property actually belonging
to them at the time of the constitution of the partnership, with the intention of dividing the same
among themselves, as well as the profits which they may acquire therewith is called:
16. A partnership without a definite period of existence and which can be dissolved at any time by any
of the partners is called:
e.
None of the above
17. A partner whose liability for partnership debts is limited to his
capital contribution is called:
a. General partner
d. Secret partner
b. Limited partner
e.
None of the above
c. General-limited partner

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18. A partner who has all the rights, power and subject to all the restrictions of a general partner but
whose liability is, among themselves, limited to his capital contribution is called:
a. General partner
b. Limited partner
C. General-limited partner
d. Dormant partner
19. Bears the risk of things contributed to the partnership:
a. Contributing partner
b. Limited partner
C.
Partner contributing usufructuary rights
d. All of the above
20. Refers to persons who represent themselves, or consent to another or others to represent them to
anyone that they are partners:
a. General partnership
b. Limited partnership.
c. Partnership by estoppel
21. Has priority over partnership assets:
a. Debtors
b. Creditors
c.
Partners
d. All of the above
22. Can only be made with the consent of all partners:
a Waiver or compromise b. Sell equipment
c. Borrow money d. None of the above
23. A partnership where all the partners are general partners who as such are liable for partnership
debts to the extent of their separate property after all the partnership assets have been exhausted is
called:
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a. Limited partnership
b. General partnership
C. Universal partnership
(d. Particular partnership
24. A partner who is liable for the payment of partnership debts to the extent of his separate property
after the partnership assets are exhausted is called:
a. Managing partner
c. General partner
b. Limited partner
d.
Silent partner
25. A, B and C are partners. Their contributions are as follows: A, P60,000; B, P40,000 and C, services.
The partners agreed to divide profits and losses in the following proportions: A, 35%; B, 25% and C, 40%.
If there is a loss of P10,000, how should the said loss of P10,000 be shared by the partners?
a. A, P6,000; B, P4,000; C, nothing b. A, P3,000; B, P2,000; C, P5,000
c.
A, P3,500; B, P3,500; C, P3,000 d. A, P3,500; B, P2,500; C, P4,000
26. A, B and C are partners. Their contributions are as follows: A,
P60,000; B, P40,000; C, services. The partners did not agree on how to divide profits and losses. If there
is a loss of P10,000, how should the said loss of P10,000 be shared by the partners?
a. A, P6,000; B, P4,000; C, nothing b. A, P3,000; B, P2,000; C, P5,000 c. A, P3,500; B, P3,500; C, P3,000 d.
A, P3,500; B, P2,500; C, P4,000 e. None of the above
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27. When the manner of management has not been agreed upon, who shall manage the affairs of the
partnership?
a. Capitalist partners
b. Industrial partners
c. Capitalist-industrialist partners
d. All of the partners
None of the above
28. As a general rule, a partner cannot ask for a formal accounting of the affairs of the partnership
during its existence and before it is dissolved, except:
a. When he is wrongfully excluded from the partnership business b. When the right exists under the
terms of any agreement
C.
As provided by Article 1807
d. Whenever other circumstances render it just and reasonable e. All of the above
29. A partnership is dissolved:
a.
In contravention of the partnership agreement by the express will of any partner at any time.
b. By any event which makes it unlawful or the business of the partnership to be carried on or for the
members to carry it on in partnership.
C. When a specific thing which a partner had promised to contribute to the partners perishes before its
delivery to the partnership.
d. By the loss of the thing, whether before or after its delivery to the partnership, when the partner who
contributed it having reserved the ownership thereof, has only transferred to the partnership the use or
enjoyment of the same.
e.
All of the above
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30. A partnership is dissolved, except:
a. By the death of any partner
b. By the insolvency of any partner or of the partnership
c. By the civil interdiction of any partner
d. By the insanity of any partner
e. All of the above
31. On application by or for partner the court shall decree a dissolution whenever:
a. A partner becomes in any other way incapable of performing his part of the partnership contract.
b. A partner has been guilty of such conduct as it tends to affect prejudicially the carrying on of the
business.
c. A partner willfully or persistently commits a breach of the partnership agreement that it is not
reasonably practicable to carry on the business in partnership with him.
d. The business of the partnership can only be carried on at a loss.
e. All of the above
32. X, Y and Z are in partnership business. X contributed P10,000, Y contributed P5,000 and Z his services
only. After payment of partnership debts, what remains of the partnership assets is P6,000 only. In the
absence of terms to the contrary, the share of Z will be equal to:
a.
That of Y
b. P2,000
C.
That of X d. Nothing
33. K is an industrial partner. Besides his services, he also contributed capital to the partnership. There is
no agreement or stipulation as to the profits or losses. The share of K in the profit is
a. the remaining partners will determine his share in profits. b. combination of C and D below.
L
c. such
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such share as may be just and equitable under the
circumstances.
d. pro-rata to his contributions
34. Three of the following enumerations are rights of a general partner in a limited partnership which
are also enjoyed by a limited partner. Which among them is the exception?
a. To have the books of the partnership kept at the principal place of business of the partnership, and at
a reasonable hour to inspect and copy any of them;
b. To 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; To have
dissolution and winding up by decree of court;
C.
d. To have all the rights and be subject to all the restrictions and liabilities of a partner in a partnership
without limited partners.
10
35. Every contract of partnership having a capital of P3,000 or more in money or property shall appear in
a public instrument which must be recorded in the Securities and Exchange Commission. Failure to
comply with said requirements
a. will not affect the liability of a partnership and the members thereof to third persons.
b. will render the partnership void.
C.
will not give the partnership a legal personality.
d. will give the partnership a de facto existence.
36. A, B and C are partners in X Company. D owes the partnership P4,500. A, a partner, received from D
a share of P1,500 ahead of partners B and C, by giving D a receipt for his share only. When B and C were
collecting from D, the latter was already insolvent.
a
Partner A can be required to share the P1,500 with B and C. b. A cannot be required to share the P1,500
with B and C.
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C.
B and C should automatically exhaust first all remedies to collect from D.
d. B and C can automatically deduct from the capital contribution of A in the partnership, their
respective share in the P1,500.
37. A partner whose connection with the partnership is open and public, such as by including his name
in the firm name of the partnership is called:
a. Nominal partner
d.
Dormant partner
b. Ostensible partner
e.
None of the above
c. Secret partner
38. A partner who has no voice nor say in the management of the affairs of the partnership is called:
a. Nominal partner
d. Dormant partner
b. Secret partner
c. Silent partner
39. A partner who does not participate in the management of the affairs of the partnership and whose
connection with it is not made known to the public is called:
a. Ostensible partner
b. Secret partner
d. Dormant partner e. None of the above
c. Silent partner
40. A person who, although not actually a partner, is made liable for the debts of the partnership to
third person by reason of his acts or omissions is called:
a. Ostensible partner (b. Nominal partner
d. Dormant partner
e.
None of the above
C.
Silent partner

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41. In three of the following instances, the certificate of a limited partnership may be amended. Which is
the exception?
a. Change in the character of the business
b. There is a false or erroneous statement in the certificate.
c. Death of a general partner
d. A person is substituted as a limited partner.
42. A partner who contributes money or property to the capital of the partnership is called:
a. Industrial partner
d. Nominal partner
c. Capitalist-industrial partner
43. A partner who contributes his work, labor or industry to the common fund of the partnership is
called:
a Industrial partner
d.Ostensible partner
e.None of the above
44. A partner who contributes money or property as well as his work or industry to the capital of the
partnership is called:
a. Industrial partner
d. Managing partner
e.None of the above
C c. Capitalist-industrial partner
45. A partnership having for its object determinate things, their use o fruits, or a specific undertaking, or
the exercise of a profession or vocation is called:
a. Partnership by estoppel
b. Particular partnership
c. Universal partnership of all present property
d. Universal partnership of profits
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46. A partnership suffered losses in the first year of its operation. X, a capitalist partner, cannot
contribute an additional share to the capital because of insolvency. Can X be obliged to sell his interest
to the other partners on the ground of such refusal?
a. Yes. X's refusal to contribute his additional share reflects his lack of interest in the continuance of the
partnership.
b. No, because there is actually no imminent loss of the business. c. Yes, provided that X is paid the value
of his interest.
d. No, because his refusal is justifiable.
47. A partner in a limited partnership cannot contribute
a.
cash
b. property
d. partly cash and partly property
e.
none of the above
c. services
48. Which of the following is considered prima facie evidence of the existence of a partnership?
a.
Where payment of interest on a loan varies with the profits of the business.
(b. The receipts by a person of a share of the profits.
c. The sharing of gross returns of a business.
d. Where the parties are established as co-owners of a property.
49. A, B and C are partners. Their contributions are as follows: A, P60,000; B, P40,000, and C, services.
The partners agreed to divide the profits and losses in the following proportions: A, 35%; B, 25% and C,
40%. If there is a profit of P10,000, how should the said profit of P10,000 be distributed among the
partners?
a. A, P6,000; B, P4,000; C, nothing b. A, P3,000; B, P2,000; C, P5,000 c. A, P3,500; B, P2,500; C, P4,000 d.
A, P3,500; B, P3,500; C, P3,000 None of the above
e.
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50. A and B are partners, with A as the managing partner. D is indebted to A in the amount of P10,000
and to the partnership in the amount of P5,000. Both debts are due and demandable. D paid A P3,000. A
issued to D a receipt in his own name. How should the amount of P3,000 be applied?
a.
The P3,000 should be applied to the indebtedness of D to A. b. The P3,000 should be applied to the
indebtedness of D to the partnership.
c. P2,000 should be applied to the indebtedness of D to the partnership and P1,000 to the indebtedness
of D to A.
d. P1,000 should be applied to the indebtedness of D to the partnership and P2,000 to the indebtedness
of D to A.
51. A and B are partners, with A as the managing partner. D is indebted to A in the amount of P10,000
and to the partnership in the amount of P5,000. Both debts are due and demandable. D paid A P3,000. A
issued to D a receipt in the name of the partnership. How should the payment of P3,000 be applied?"
a. The P3,000 should be applied to the indebtedness of D to A. b. The P3,000 should be applied to the
indebtedness of D to the partnership.
‫ن‬
P2,000 should be applied to the indebtedness of D to the partnership and P1,000 to the indebtedness of
D to A.
d. P1,000 should be applied to the indebtedness of D to the partnership and P2,000 to the indebtedness
of D to A. None of the above
e.
52. A, B and C are partners in X and Company. D represented himself as a partner in X and Company to
E, who, on the faith of such representation, extended P10,000 credit to X and Company. Assuming only
A and B consented to such representation, who shall be held liable to E?
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a.
Since E extended the P10,000 credit to X and Company, a partnership liability exists, thus, all the
partners and D are
liable.
b. Only A, B and D are partners by estoppel and, thus, are liable pro-rata to E.
c. Only D, who made the representation shall be liable to E.
d. Only partners A, B and C who benefited from the credit extended by E shall be liable to E.
53. Which of the following is not a property right of a partner?
a. His rights in specific partnership property
•
b. His interest in the partnership
C. His right to participate in the management
d. To demand true and full information of all things affecting the partnership
54. A, B, C and D are partners. Their contributions are as follows: A, P50,000; B, P30,000; C, P20,000; D,
services. The partnership incurred obligations to third persons which the firm was unable to pay. After
exhausting the assets of the partnership, there still is unpaid balance of P10,000. Who are liable for the
payment of the unpaid balance of P10,000? How much each?
a. A, P5,000; B, P3,000; C, P2,000; D, nothing A, P2,500; B, P2,500; C, P2,500; D, P2,500
b
c. A, P4,000; B, P3,000; C, P2,000; D, P1,000 d. A, P4,000; B, P4,000; C, P2,000; D, nothing
55. Except when authorized by the other partners, one or more but less than all the partners have no
authority to:
a. Assign the partnership property in trust for creditors.
b. Dispose of the goodwill of the business
c. Confess a judgment
d. Compromise a partnership claim or liability
C.
All of the above
Nd
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56. One or more but less than all the partners have no authority to perform the following acts, except:
a.
Do any act which would make it impossible to carry on the ordinary business of the partner.
b. Submit a partnership claim or liability to arbitration.
c. Renounce a claim of the partnership.
d. Convey partnership property in the ordinary course of partnership business.
57. A limited partner shall not become liable as a general partner unless:
a.
He takes part in the control of the business.
b. He contributes his services to the capital of the firm.
c. His surname appears in the partnership name.
d. The word "LIMITED" is not added to the name of the
e.
partnership.
All of the above
58. All partners are liable solidarily with the partnership for the purpose of making good the loss:
a. Where one partner acting within the scope of his apparent. authority receives money or property of a
third person and misapplies it.
b. Where the partnership in the course of its business receives money or property of a third person and
the same is misappropriated by any partner while it is in the custody of the partnership.
C.
Where by any wrongful act or omission of any partner acting in the ordinary course of the business of
the partnership or with the consent of his co-partners loss or injury is caused to any person who is not a
partner in the partnership.
d. All of the above
e.
None of the above
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59. Refers to persons who represent themselves, or consent to another or others to represent them to
anyone that they are the partners.
a. General partnership
b. Limited partnership
c. Partnership by prescription
d. Partner by estoppel
60. A partnership is dissolved without violation of the partnership
agreement:
a. By the termination of its definite term or particular undertaking.
b. By the express will of any partner, who must act in good faith, when no definite term or particular
undertaking is specified. c. By the express will of all the partners who have not assigned their interests,
either before or after the termination of any specified term or particular undertaking.
d. By the bona fide expulsion of any partner from the business. All of the above
e.
61. Without the written consent or ratification of the specific act by all the limited partners, a general
partner or all of the general partners have no authority to:
a.
Do any act in contravention of the certificate.
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. All of the above
62. General partners shall have no right to perform the following acts without the written consent or
ratification by all the limited partners, except:
a. Admit a person as a general partner.
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b. Admit a person as a limited partner, unless the right to do so is given in the certificate.
C.
Continue the business with partnership property on the death, retirement, insanity, civil interdiction or
insolvency of a general partner, unless the right to do so is given in the certificate.
d. To 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.
63. B-1, B-2 and B-3 are equal partners in 3-Brothers Partnership. The partnership is indebted to PC for
P150,000. Partner B-1 is indebted to SC for P20,000. PC attached and took all the assets of the
Partnership amounting to P90,000. B-2 and B-3 are solvent while B-1 is insolvent and all what he owns is
a land valued at P15,000.
a. SC has priority to the land of B-1 as a separate creditor. b. PC has priority to the land of B-1 to cover B-
1's share of the P60,000 remaining liability of the partnership.
C. B-2 and B-3 have priority to the land of B-1 if they paid PC the P60,000 remaining liability of the
partnership.
d. PC and SC shall both have priority to the land of B-1 in proportion to their claims of P60,000 and
P20,000, respectively.
64. A partnership is dissolved on the death of a:
b. Industrial partner
a. General partner
d. Limited partner
e
a, b and c
C.
General-limited partner
65. In case of an imminent loss of the business of the partnership, the following partners are required to
give additional contribution, except:
a. Capitalist partner
b. General partner
d. Industrial partner
e. None of the above.
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66. A partnership
a.
is created by agreement of the partners.
b. has a juridical personality separate and distinct from that of each of the partners.
c. may be constituted in any form, except where immovable property or real rights are contributed
thereto, in which case a public instrument shall be necessary.
d. is dissolved by the death of a partner.
e. all of the above
67. A partner shall have the right:
a. to ask that the books of the partnership be kept at the principal place of business of the firm, and at
any reasonable hour have access to and inspect and copy any of them.
b. to demand true and full information of all things affecting the partnership.
c. to share in the profits and surplus assets of the firm.
d. to ask for judicial dissolution.
e.
all of the above
68. The following persons are disqualified to form a universal partnership. Who are the exception?
a. Brother and Sister
b. Husband and Wife
C.
Those guilty of adultery and concubinage
d. Those guilty of the same criminal offense, if the partnership is entered into in consideration of the
same.
69. X, Y and Z were partners. X is an industrial partner. During the first year of operation, the firm
realized a profit of P60,000. During the second year, the firm sustained a loss of P30,000. So, the net
profit for the two years of operation was only P30,000. In the Article of Partnership, it was agreed that X,
the industrial partner would get 1/3 of the profit but would not share in the losses. How much will X, the
industrial partner get?
179
a. X will get only P20,000 which is 1/3 of the profit of the 1st year of operation.
b. X will get only P10,000 which is 1/3 of the net profit.
C.
c. X will get only P20,000 in the first year and none in the second year.
d. X will share in the loss in the second year.
70. Three (3) of the following are rights of a partner. Which one (1) is
not?
a. Right to associate another person to his share.
b. Right to admit another partner
c. Right to inspect and copy partnership books
d. Right to ask dissolution of the firm at the proper time
71. The remedy of capitalist partners against an industrial partner who engaged in a business for himself
without the expressed permission from the partnership is
a. to compel the industrial partner to sell his interest to the said capitalist partners.
b. to exclude him from sharing in the profits of the partnership. c. to remove him as manager if he is
appointed as manager of the partnership.
d. to expel him from the partnership and claim for damages.
72. Which of the following is not an element of a partnership?
a. There must be a valid contract.
b. There must be a mutual contribution of money, property or industry to a common fund.
c. There must be an intent to engage in lawful business, trade or profession.
(d. None of the above
180
73. A limited partner shall not become liable as a general partner unless
a. he takes part in the control of the business.
b. he contributes his services to the capital of the firm..
c. his surname appears in the partnership name.
d. the word "LIMITED" is not added to the name of the
e.
partnership.
all of the above
74. A, B and C, capitalist partners, each contributed P30,000, P20,000 and P10,000 respectively; and D;
the industrial partner contributed his services. Suppose X, a customer, is the creditor of the firm to the
amount of P180,000. How can X recover the P180,000?
a. X must sue the firm and get P60,000 from all the partners including D, the industrial partner. X can still
recover the balance of P120,000 from the four partners jointly..
b. X can recover from the firm P60,000. X can still recover the balance of P120,000 from the capitalist
partners only.
C.
X can recover from the firm P60,000. X can still recover the balance of P120,000 from any of the
partners solidarily.
d. X can recover from the firm P60,000 and consider the balance of P120,000 as a loss.
75. A capitalist partner engaged for his own account in an operation which is of the kind of business in
which the partnership is engaged. Said partner can be
a. compelled to sell his interest in the partnership to the other capitalist partners..
b. compelled to dissolve or discontinue the operation of his business.
c. compelled to bring to the common funds of the partnership any profits accruing to him from his
transactions.
d. denied his share in the profits of the partnership.
ESSAY AND DISCUSSION
1. Give an example of a partnership by estoppel.
181
2. A, B and C are partners in a gasoline station business. They contributed P100,000 each. D is admitted
as a new partner with a contribution of P50,000. At the time of his admission, the partnership has an
outstanding obligation to Caltex-Petron, Inc. in the amount of P410,000.
a. What is the liability of D for the existing obligation of the partnership?
b. What is the liability of D if the obligation was incurred subsequent to his admission?
3. A, B and C are partners in X and Company. They contributed equally to the partnership. They have no
stipulation regarding the share of each partner in the profits and losses. The assets of the partnership
amounted to P100,000 after a year of operation. The partnership is indebted to R in the amount of
P160,000. S is a separate creditor of C for P30,000. If C is insolvent and what is left for him is a land
valued P20,000, how should the different claims of the creditors be settled?
4. a. What assets of a general partnership should be considered in payment of its liabilities?
b. In what order should the liabilities of a general partnership be paid?
c. Explain the purpose of a limited partnership.
5. Distinguish partnership from a corporation under the following
instances:
a. Initial capital formation
c. Liability to third person
b. Commencement of life d. Succession
6. When is a limited partner liable as a general partner?
182
7. If a partner is insolvent, how will his individual property be distributed?
8. A, B, C, D, and E agreed to organize and have in fact organized a partnership with a capital
contribution of P10,000 each.
a. Assume that the agreement was not made in writing. Is the partnership valid? Answer with reason.
b. Assume that the agreement was made in a public instrument but was not registered in the SEC, has
the partnership a legal personality?
c. Partner E also contributed his land and bodega to the partnership, but no public instrument is
executed. Is the partnership agreement valid? Answer with reasons.
d. Assume further that the partnership is engaged in the real estate business. Capitalist partner A also
engages in the same business. Is he allowed to do so? Answer with reasons.

Exercises in Contract of Partnership Including Cpa Examination Questions

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Exercises in Contract of Partnership Including Cpa Examination Questions

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EXERCISES IN CONTRACT OF PARTNERSHIP INCLUDING CPA EXAMINATION QUESTIONS

Exercises in Contract of Partnership

Exercises in Contract of Partnership.

Exercises in Contract of Partnership

Exercises in Contract of Partnership

Exercises in Contract of Partnership

Exercises in Contract of Partnership

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