EMILIO AGUINALDO COLLEGE

ACCOUNTING
FINAL EXAM – 2ND SEMESTER AY 2018-2019
PROF. MA. ROWENA F. DIAZ

STUDENT’S NAME ________________________________________ SCORE ___________

Test I. Multiple choice questions. Choose the letter of the correct answer.
1. Which of the following partners does not or do not take active part in the management of the
partnership business?
a. Silent partner b. Dormant partner c. Nominal partner d. All of the above
2. An industrial partner contributes:
a. His labor and skill only b. His personal assets c. His money, property, and industry. d. His
cash and industry.
3. The following are inherent rights of a partner, EXCEPT:
a. Right to share in the profits
b. Right to participate in the management of the partnership
c. Right to share in the partnership assets in the event of liquidation
d. Right to demand salaries
4. A partner who contributes only his services
a. Managing partner b. Capitalist partner c. Nominal partner d. Industrial partner
5. A person who allows his name to be used by the partnership
a. Secret partner b. Nominal partner c. General partner d. Dormant partner
6. As far as creditors are concerned, which of the following partners is/are liable for unpaid debts of the
partnership?
a. Industrial partner b. Nominal partner c. Silent partner d. All of the above
7. The Articles of Co-Partnership is to be registered with the:
a. Bureau of Internal Revenue
b. Department of Trade and Industry
c. Securities and Exchange Commission
d. Department of Labor and Employment
8. A partnership formed and has complied with all the legal requirements.
a. De facto partnership b. De jure partnership c. General partnership d. Implied partnership
9. A partnership where all the partners have unlimited liability.
a. De facto partnership b. De jure partnership c. General partnership d. Implied partnership
10. The following are the advantages of a partnership except:
a. Easier and less expensive to organize than a corporation
b. Easier to dissolve or liquidate in the event that the partners do not wish to continue the business
c. Business decisions will be facilitated because there will be less decision makers and lesser
formalities
d. There is more uncertainty as to the business continuity or stability because it can be dissolved
easily
11. If the partners have not drawn up any agreement, then they must share profits and losses
a. Equally b. By any means that will save taxes c. By any capital ratio d. According to capital
contributions
12. Among the various options available for determining the partners’ share of profit are the following
except
a. Capital contributions and service to the partnership b. Loans to the partnership c. Capital
contributions d. Stated fraction or ratio
13. If the capital credit of the new partner is less than his contribution with no adjustment in asset A
person may become a partner in a partnership by all of the following except
a. Investing a partnership with a bonus to the new partner
b. Making a loan to the partnership
c. Investing in the partnership with a bonus to the old partners
d. Purchasing a partner’s interest
14. The partners have the following rights except one:
a. share in profits b. receive net assets at liquidation point c. co manage the business
d. transfer ownership at will
15. Which of the following is not a characteristic of all partnerships?
a. taxable entity b. co ownership of property c. mutual agency d. voluntary
association
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16. A new partner may be admitted in a partnership by any of the following except
a. Investing in the partnership b. Purchasing preferred stock of the partnership c. Purchasing a
partner’s interest d. Both a and c
17. When a partner withdraws cash or other assets, the drawing account is
a. Debited b. Credited c. Debited and credited d. Not affected
18. Advantages of a partnership over a corporation do not include
a. ease of formation b. ease of decision c. more capital d. freed from government regulation
19. A capitalist partner cannot be a limited partner
a. True b. False c. Uncertain
20. The characteristic of unlimited liability is a disadvantage from the viewpoint of the partnership
creditors
a. True b. False c. Uncertain
21. A business such as a partnership has to file its partnership agreement and register it’s firm’s name with
these government agencies, except one:
a. Securities and Exchange Commission b. Department of Trade and Industry c. Bureau of
Internal Revenue d. National Bureau of Investigation
22. The partners’ personal account which was collected by the partnership and credited to its accounts
receivable is a violation of the
a. Partners’ Equity Concept b. Business Entity Concept c. Realization Principle d. Accrued
Principle
23. It is easier to change ownership in a corporation than in a partnership
a. True b. False c. Uncertain
24. A loan due to a partner is presented in the statement of financial position as a
a. current asset b. current liability c. partner’s equity d. fixed asset
25. This partner does not share in the losses incurred in the partnership
a. limited partner b. general partner c. industrial partner d. capitalist partner
26. Properties contributed by the partners should be recorded at
a. acquisition cost b. book value c. fair market value d. historical cost
27. Accounts receivable invested by a partner should be recorded at its
a. realizable amount b. book value c. gross amount d. market value
28. Damon and David formed a partnership with Damon investing cash of P150,000. How much should
David invest for a 40% ownership in assets and profits?
a. P100,000 b. P60,000 c. P225,000 d. P90,500
29. characteristic describing a partnership as a judicial partnership which can acquire, sell or dispose
properties and incur obligations
a. taxable entity b. legal entity c. mutual entity d. voluntary entity
30. A partnership has an indefinite life just like a corporation.
a. True b. False c. Uncertain
31. The law that governs partnerships is:
a. Philippine Constitution b. Civil Code c. Accountancy Law d provincial ordinance
32. A partnership is :
a. a contract b. a promise c. gratuitous in character d. involuntary
33. The contract of the partnership is technically known as
a. by-laws of partnership
b. memorandum of partnership
c. affidavit of partnership
d. articles of co partnership
34. In a general partnership, the liabilities of the partners are limited to their contributions.
a. True b. False c. Uncertain
35. A general co-partnership is also know an a trading partnership
a. True b. False c. Uncertain
36. Which of the following does not result in the dissolution of a partnership?
a. marriage of a partner b. withdrawal of a partner c. addition of a new partner d.
death of a partner
37. If a new partner purchases his interest from an old partner, the only entry on the partnership books is
a credit to the purchaser’s capital account with a debit to the
a. bonus account b. cash account c. capital account of the selling partner d. capital account of
other partners
On August 1, 2015, Jenny and Yvonne formed a partnership with the following contributions:
Jenny Yvonne
Cash P60,000 P90,000

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 Merchandise 100,000 120,000
Building 250,000
Equipment 120,000
The partners agreed to share the profits and losses as follows : Jenny 60% ; Yvonne 40%.
38. The capital account of Jenny at the time of partnership formation will be credited by
a. P410,000 b. P350,000 c. P370,000 d. P340,000
39. Which of the following entries should be made to record the formation of the partnership?
a. Cash P60,000
Merchandise Inventory 100,000
Building 250,000
Jenny, Capital P410,000
b. Cash P90,000
Merchandise Inventory 120,000
Equipment 120,000
Yvonne, Capital P330,000
c. Cash P150,000
Merchandise Inventory 220,000
Building 250,000
Equipment 120,000
Jenny, Capital P444,000
Yvonne, Capital 296,000
d. Cash P150,000
Merchandise Inventory 220,000
Building 250,000
Equipment 120,000
Jenny, Capital P410,000
Yvonne, Capital 330,000
On August 1, 2015, Jenny and Yvonne formed a partnership with the following contributions:
Jenny Yvonne
Cash P60,000 P90,000
Merchandise 100,000 120,000
Building 250,000
Equipment 120,000
The partners agreed to share the profits and losses equally. The building is subject to a mortgage at
Banco de Oro amounting to P60,000 which will be assumed by the partnership.
40. The capital account of Jenny at the time of partnership formation will be credited by
a. P410,000 b. P350,000 c. P370,000 d. P340,000
41. Which of the following entries should be made to record the formation of the partnership?
a. Cash P150,000
Merchandise Inventory 220,000
Equipment 120,000
Building 190 ,000
Jenny, Capital P350,000
Yvonne, Capital 330,000
b. Cash P150,000
Merchandise Inventory 220,000
Equipment 120,000
Building 310,000
Mortgage payable P 60,000
Jenny, Capital 410,000
Yvonne, Capital 330,000
c. Cash P150,000
Merchandise Inventory 220,000
Building 250,000
Equipment 120,000
Mortgage payable P 60,000
Jenny, Capital 350,000
Yvonne, Capital 330, 000
d. Cash P150,000
Merchandise Inventory 220,000
Building 250,000
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 Equipment 120,000
Mortgage payable P 60,000
Jenny, Capital 340,000
Yvonne, Capital 340, 000
On August 1, 2015, Jenny and Yvonne formed a partnership with the following contributions:
Jenny Yvonne
Cash P60,000 P90,000
Merchandise 100,000 120,000
Building 250,000
Equipment 120,000
The partners agreed to share the profits and losses equally. The building is subject to a mortgage at Banco de
Oro amounting to P90,000 where the partnership will assume only P40,000.
42. The capital account of Jenny at the time of partnership formation will be credited by
a. P410,000 b. P350,000 c. P370,000 d. P340,000
43. Which of the following entries should be made to record the formation of the partnership?
a. Cash P150,000
Merchandise Inventory 220,000
Equipment 120,000
Building 190 ,000
Mortgage Payable P 40,000
Jenny, Capital 370,000
Yvonne, Capital 330,000
b. Cash P150,000
Merchandise Inventory 220,000
Equipment 120,000
Building 310,000
Mortgage payable P 90,000
Jenny, Capital 320,000
Yvonne, Capital 330,000
c. Cash P150,000
Merchandise Inventory 220,000
Building 250,000
Equipment 120,000
Mortgage payable P 40,000
Jenny, Capital 350,000
Yvonne, Capital 350, 000
d. Cash P150,000
Merchandise Inventory 220,000
Building 250,000
Equipment 120,000
Mortgage payable P 90,000
Jenny, Capital 325,000
Yvonne, Capital 325, 000
On September 15, 2015, Bing and Bong formed a partnership with the following contributions:
Bing Bong
Cash P180,000 P270,000
Merchandise 300,000 360,000
Building 750,000
Equipment 360,000
The partners agreed to share the profits and losses equally. The building is subject to a mortgage at Metro
Bank amounting to P300,000 which will not be assumed by the partnership.
44. The capital account of Bing at the time of partnership formation will be credited by
a. P1,230,000 b. P930,000 c. P1,110,000 d. P1,020,000
45. Which of the following entries should be made to record the formation of the partnership?
a. Cash P450,000
Merchandise Inventory 660,000
Equipment 360,000
Building 750 ,000
Bing, Capital 1,230,000
Bong, Capital 990,000
b. Cash P450,000
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 Merchandise Inventory 660,000
Equipment 360,000
Building 450 ,000
Bing, Capital 930,000
Bong, Capital 990,000
c. Cash P450,000
Merchandise Inventory 660,000
Equipment 360,000
Building 750 ,000
Mortgage Payable 300,000
Bing, Capital 930,000
Bong, Capital 990,000
d. Cash P450,000
Merchandise Inventory 660,000
Equipment 360,000
Building 750 ,000
Bing, Capital 1,110,000
Bong, Capital 1,110,000
On February 15, 2015, Mara and Clara formed a partnership with the following contributions:
Mara Clara
Land (acquisition cost) P300,000
Cash P 230,000
Three hours after the partnership formation, on February 15, 2015, the partnership sold the land for
P450,000. The partners agreed to share the profits and losses equally.
46. The capital account of Mara at the time of partnership formation will be credited by
a. P450,000 b. P300,000 c. P318,000 d. P265,000
47. Which of the following entries should be made to record the formation of the partnership?
a. Cash P230,000
Land 300,000
Mara, Capital 230,000
Clara, Capital 300,000
b. Cash P680,000
Gain on sale of land 150,000
Mara, Capital 230,000
Clara, Capital 300,000
c. Cash P230,000
Land 450,000
Mara, Capital 290,000
Clara, Capital 390,000
d. Cash P230,000
Land 450,000
Mara, Capital 230,000
Clara, Capital 450,000
48. Cunanan invests P160,000 in a partnership for a 20% interest. Prior to his admission, the partnership
had two partners with capital balances of P190,000 each. If no asset revaluation is recognized prior to
Cunanan’s admission, what amount is credited to his capital account?
a. P90,000 b. P108,000 c. P135,000 d. P160,000
49. Collado’s interest in the partnership is P112,000. Cuervo buys Collado’s interest for P120,000. How
much is the capital balance of Cuervo after the purchase?
a. P108,000 b. P110,000 c. P112,000 d. P120,000
50. Conn and Cass for a partnership and have capital balances of P100,000 and P200,000, respectively. Idf
they agree to admit Charr into the partnership how much will Charr invest to have a 1/3 interest?
a. P100,000 b. P120,000 c. P150,000 d. P200,000
Test II. Multiple Choices: Choose the letter of the correct answer.

1. Which of the following statements is TRUE?

a. A corporation, just like a partnership, has a legal personality separate and distinct from
the shareholders
b. A corporation is formed by the mere agreement of the incorporators
c. The maximum of the corporation is fifty (50) years
d. The authority and powers of a corporation emanate from the Board of Directors

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 e. Answer not given
2. Owners of a corporation whose names are mentioned in the articles of incorporation are
called:
a. Shareholders b. Members c. Promoters d. Incorporators e. Answer not given
3. The document that is required to be submitted by a corporation to the Securities and
Exchange Commission for approval that enumerates its powers and authority is called:a.
a. Corporate by-laws
b. Treasurers affidavit
c. Articles of incorporation
d. Stock certificate
e. Answer not given
4. Which of the following is an example of a public corporation?
a. San Miguel Corporation b. Paranaque City c. National Power Corporation d.
MERALCO e. Answer not given
5. Which of the following is an example of a quasi-public corporation?
a. City of Manila
b. PLDT
c. Shoemart, Inc
d. Department of Agriculture
e. Answer not given
6. A corporation which is controlled by another corporation is called:
a. Parent corporation
b. Subsidiary corporation
c. Holding corporation
d. Group of companies
e. Answer not given
7. Which of the following classes of preference shares entitles the holders to receive dividends in
arrears?
a. Noncumulative preference shares
b. Cumulative preference shares
c. Nonparticipating preference shares
d. Participating preference shares
e. Answer not given
8. Which of the following classes of preference shares entitles the holders to receive dividends
beyond the fixed dividend rate?
a. Noncumulative preference shares
b. Cumulative preference shares
c. Nonparticipating preference shares
d. Participating preference shares
e. Answer not given
9. All of the following are the basic rights of a shareholder, EXCEPT the:
a. Right to be voted as director
b. Right to receive dividends
c. Right to acquire new shares of stock that the corporation may issue
d. Right to attend the meeting of the board of directors
e. Answer not given
10. A corporation is required to maintain the following books of books and records, EXCEPT the:
a. Minutes book
b. Stock and transfer book
c. Books of accounts
d. Log book
e. Answer not given

Good luck, happy holidays and to God be the Glory!

mrfd/2018