1. One of the following is not a characteristic of contract of partnership.

a. Real, in that the partners must deliver their contributions in order for the partnership contract to be
perfected.
b. Principal, because it can stand by itself.
c. Preparatory, because it is a means by which other contracts will be entered into.
d. Onerous, because the parties contribute money, property or industry to a common fund

2. The minimum capital in money or property except when immovable property or real rights thereto
are contributed, that will require the contract of partnership to be in a public instrument and be
registered with the Securities and Exchange Commission (SEC).
a. P5,000.00
b. P10,000.00
c. P3,000.00
d. P30,000.00

3. If the partnership has the minimum capital mentioned in no. 2 but the contract is not in a public
instrument or the same is not recorded with the SEC, the partnership:
a. is void.
b. is voidable.
c. does not acquire juridical personality.
d. still acquires juridical personality.

4. Three of the following partnership contracts are void. Which one is not?
a. A universal partnership of all present property between husband and wife.
b. A universal partnership of profits between a man and a woman living together as husband and wife
without the benefit of marriage.
c. A particular partnership between husband and wife.
d. A universal partnership of profits between a private individual and a public officer.

5. Which of the following losses will not cause the dissolution of a partnership?
a. Loss before delivery of a specific thing which a partner has promised to contribute to the partnership.
b. Loss of a specific thing after its delivery to and acquisition of its ownership by the partnership from
the partner who contributed the same.
b. Loss after delivery of a specific thing where the partner contributed only its use and enjoyment, he
having reserved the ownership thereof.
d. Loss before delivery of a specific thing where the partner has promised to contribute only its use and
enjoyment, reserving the ownership thereof.

6. The partnership will bear the risk of the loss of three of the following things. Which is the exception?
a. Things contributed to be sold.
b. Fungible things or those that cannot be kept without deteriorating.
c. Things contributed so that only their use and fruits will be for the common benefit.
d. Things brought and appraised in the inventory.

7. Benito, Ignacio, Gregorio, Artemio and Servando are partners in BIGAS Company which is engaged in
the buying and selling of rice. Benito is the manager. Ignacio was also given a special power of attorney
by the partnership to buy a van for the company. No other power was given to all the partners. In which
of the following acts or contracts is the partnership not bound by the act of the partner?
a. Ignacio buying rice for the partnership from Teodoro who has no knowledge of Ignacio’s lack of
authority.
b. Ignacio buying a van for the partnership from Teresa.
c. Gregorio buying a van for the partnership from Thelma who has no knowledge of Gregorio’s lack of
authority.
d. Benito selling rice for the partnership.

8. Which of the following statements is incorrect?

a. Partnership creditors are preferred as to partnership assets.
b. Partnership creditors are preferred as to each partner’s separate assets.
c. A partner’s separate creditors are preferred as to the partner’s separate assets.
d. A partner’s separate creditors may attach a partner’s share in the partnership’s assets.

9. The change in the relation of the partners cause by any ceasing to be associated in the carrying on the
business is known as
a. termination of the partnership
b. winding up of partnership affairs
c. liquidation of the partnership business
d. dissolution of the partnership

10. A decree by the court is necessary to dissolve a general partnership based on three of the following
grounds. Which one will not require such decree but will cause the automatic dissolution of the
partnership?
a. The business of the partnership can only be carried on at a loss.
b. A partner is shown to be of unsound mind.
c. A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the
business
d. A partner is civilly interdicted.

11. When is the partnership not bound by the act/s of a partner after dissolution in the following cases?
a. Acts necessary to wind up partnership affairs.
b. Acts to complete transactions begun before dissolution.
c. New transactions where the third person is a previous creditor and there was a publication of the
dissolution in a newspaper of general circulation in the place or places where the business has been
carried on but such third person has not read it.
d. New transactions where the third person is a new creditor and there was a publication of the
dissolution in a newspaper of general circulation in the place or places where the business has been
carried on but such creditor has not read it.

12. What is the order of payment of liabilities of a dissolved general partnership using the code number
representing each liability?
I. Those owing to partners other than for capital or for profits.
II. Those owing to creditors other than partners.
III. Those owing to partners in respect of profits.
IV. Those owing to partners in respect of capital.

a. I, II, III, IV b. II, I, IV, III c. II, I, III, IV d. I, II, IV, III
13. In a limited partnership where there are 4 partners:
a. All the partners must be a limited partner.
b. The number of limited partner must be equal to the number of general partner, that is, 2:2.
c. The number of limited partners must be greater than the number of general partners, that is, 3:1.
d. It is enough that there is one limited partner, the rest may all be general partners.

14. A limited partner shall be liable as general partner in three of the following cases. Which one is the
exception?
a. When he is a general-limited partner as stated in the certificate.
b. When he takes part in the control of the business.
c. When he participates in the management of the business.
d. When his surname which appears in the partnership name is also the surname of a general partner.

15. A person admitted to all the rights of a limited partner who has died or has assigned his interest in
the partnership is shown as:
a. An ostensible partner.
b. A liquidating partner.
c. A substituted-limited partner.
d. A general-limited partner.

16. If the assignee does not become the partner referred to in the preceding number, his rights do not
include:
a. The receipt of the assignor’s share in profits.
b. The receipt of the assignor’s other compensation by way of income.
c. The return of the assignor’s contribution.
d. The inspection of the partnership books or account of partnership transactions.

17. Which of the following will not cause the automatic dissolution of a limited partnership?
a. Death of a general partner.
b. Death of a limited partner.
c. Insolvency of a general partner.
d. Insanity of a general partner.

18. One of the distinctions between a partnership and a corporation is that a partnership:
a. May be formed by one person.
b. Is created by operation of law.
c. Acts through a board of directors.
d. May exist for an indefinite period.

19. Which of the following will not cause the automatic dissolution of a general partnership?
a. Death of a capitalist partner.
b. Insolvency of a capitalist partner.
c. Insanity of an industrial partner.
d. Civil interdiction of an industrial partner.

20. John Solanda and Sons is a partnership composed of three partners, namely: Robert Solanda, Simon
Solanda and Theodore Solanda. The partners are the sons of John Solanda who has retired from
business but who suggested that they include his name in the firm to give them an advantage since he is
well-known in business community.
I. John Solanda shall have all the rights of a general partner.
II. John Solanda shall have all the liabilities of a general partner.

Based on the foregoing facts:

a. Both statements are true.
b. Both statements are false.
c. Statement I is true; Statement II is false.
d. Statement I is false; Statement II is true.

21. Bettina, Erlinda, Amanda, Ursula, Teresa and Yolanda are partners in BEAUTY Enterprises, a dealer in
cosmetics and other beauty products, with contributions of P60,000.00, P50,000.00, P40,000.00,
P30,000.00, P20,000.00 and P10,000.00 respectively. No one was appointed as manager in the articles
of partnership.
a. Bettina is the manager because she made the biggest investment.
b. Every act in the ordinary course of business will have to be decided by the majority determined on a
per head basis.
c. Every act in the ordinary course of business will have to be decided by the controlling interest (biggest
investment) although the partners owning them do not constitute the majority.
d. All the partners are agents or managers of the partnership and any one of them may perform acts of
administration

22. PATOK Enterprises, a partnership engaged in the business of renting out video films, is owned by
Patricia, Alice, Tina, Olga and Kaye as the manager. Diana owes PATOK Enterprises P6,000.00 and Olga,
P4,000.00. Both debts are unsecured and are already due. Diana pays Olga P4,000.00 for which Olga
issues her own receipt.
a. The payment should be applied to Olga’s credit only.
b. The payment should be applied to PATOK’s credit only.
c. The payment should be divided proportionately between PATOK and Olga, at P2,400.00 and P1,600.00
respectively.
d. The payment should be divided equally between PATOK and Olga at P2,000.00 each.

23. GREAT Company, a partnership engaged in the distribution of generators, is composed of George,
Roland, Edmond, Albert and Troy. During the month of April, the following transactions were entered
into by the following partners in behalf of the partnership without any authority:
I. The sale of the generator by Roland to Juan Torres who was not aware that Roland had no
authority. Juan Torres has paid the generator which is due for delivery.
II. The purchase of a car by Edmond from Intrepid Motors whose owner was not aware of
Edmond’s lack of authority. The car and the price are due for delivery and payment, respectively.

Based on the foregoing, the partnership is bound by:

a. Transaction I only.
b. Transaction II only.
c. Both transactions I and II.
d. Neither transaction I nor II.
24. MARK Company, is a partnership engaged in the trading business, with Marquez, Alconcer, Ramos
and Kanapi as partners. Marquez, Alconcer and Ramos are capitalist partners, contributing P100,000.00,
P60,000.00 and P40,000.00 respectively. Kanapi is an industrial partner. The partners have a stipulation
that Marquez shall not be liable for partnership liabilities. After three years of continued losses, the
partnership incurred liabilities of P200,000.00 at which time its assets had dwindled to P140,000.00.
After partnership assets have been exhausted, partnership creditors may go after the separate assets of:
a. all the partners.
b. Marquez, Alconcer and Ramos, but not those of Kanapi.
c. Alconcer, Ramos and Kanapi, but not those of Marquez.
d. Alconcer and Ramos only.

25. LIFE Company, a partnership engaged in the water distribution business, is composed of partners
Larredo, Ingles, Filler and Encanto. One day, Larredo was driving the firm’s delivery truck beyond the
speed limit in order to serve its customers, when he rammed into and caused extensive damage on the
parked car of Tertullo.
a. Only Larredo can be held liable for damages of Tertullo.
b. LIFE Company and Larredo are solidarili liable for damages to Tertullo.
c. LIFE Company and the four partners are solidarily liable for damages to Tertullo.
d. LIFE Company and the four partners are jointly liable for damages to Tertullo.

26. A person admitted as a partner into an existing partnership shall be liable up to the extent of his
separate assets for what obligations?
a. Obligations of the partners existing at the time of his admission only if there was a stipulation.
b. Obligations of the partnership incurred after his admission only if there was a stipulation.
c. Obligations of the partnership incurred before and after his admission even if there was no
stipulation.
d. Obligations of the partnership incurred before his admission if there was a stipulation, and those
incurred after his admission even if there was no stipulation.

27. Aseron, the managing partner of ACE Company, was driving the delivery truck of the firm when he
rammed it into an electric post resulting in damages to the vehicle amounting to P50,000.00. To make
up for accident, Aseron worked long hours for the firm and was able to increase its sales from
P5,000,000.00 to P15,000,000.00.
a. Aseron will no longer be liable for damages to ACE because he was able to generate unusual revenues
for the firm through his extraordinary efforts.
b. Aseron will still be liable to the firm for damages but the amount will be equitably reduced since he
was able to generate unusual profits for the firm through his extraordinary efforts.
c. Aseron’s obligation to the firm for damages will be extinguished by compensation since ACE is also
liable for him for the extraordinary efforts he exerted to increase its sales.
d. Aseron and ACE will share equally in the damages of P50,000.00.

28. Trevor owes P3,000.00 to CHAMP Company, a partnership composed of Charles, Harry, Albert, Mark
and Prince, with Mark as the manager who is authorized to collect all credits of the firm. He also owes
Charles the amount of P6,000.00. Both debts are already due. Trevor gives P3,000.00 to Charles in
payment of his debt to the latter. Charles thus issues his own receipt.
a. Payment will be applied proportionately to the two credits at P1,000.00 for Charles’ credit and
P2,000.00 for CHAMP’s credit.
b. Payment will be applied equally to the two credits.
c. Payment will be applied in its entirety to Charles’ credit.
d. Payment will be applied in its entirety to CHAMP’s credit.

29. Doang and Depante have been partners for more than 5 years in the purified water business. At the
start of the sixth year, Doang assigned his interest in the partnership to Trinidad, but Depante objected
on the ground that he did not want Trinidad to be his partner.
a. Trinidad automatically became a partner of Depante when Doang conveyed his interest to him.
b. Doang and Depante continue to be partners despite Doang’s conveyance of his interest to Trinidad.
c. The partnership between Doang and Depante was automatically dissolved when Doang conveyed his
interest to Trinidad.
d. The conveyance of Doang of his interest in the partnership to Trinidad entitled the latter to inspect
the books, and participate in the management, of the partnership.

30. Querubin, Roces and Solis are partners in a law firm. Querubin was appointed as judge of the
Regional Trial Court. Such appointment:
a. Suspends the participation of Querubin in the management of the firm without causing the
dissolution of the partnership.
b. Prohibits the inclusion of the name Querubin in the firm name without dissolving the partnership.
c. Results in the dissolution of the partnership.
d. merely requires the disclosure of Querubin’s appointment to the court without dissolving the
partnership.

31. Braganza, Ortiz and Nevado want to form a partnership with Braganza contributing P500,000.00;
Ortiz, office equipment; and Nevado, his services. If the three were to form a limited partnership, who
among them will be limited partner/s?
a. Either Braganza or Ortiz or both of them.
b. Either Ortiz or Nevado or both of them.
c. Either Braganza or Nevado or both of them.
d. All the three must be limited partners.

32. Refer to the preceding number. Assume that the three decide to from a general partnership. As a
result, which of the following is incorrect?
a. Any of the three may be appointed as manager.
b. All of them may be appointed as managers.
c. Only Nevado may be appointed as a manager because he only contribute his services.
d. Any two of them may be appointed as managers.

33. CROWN Enterprises is composed of partners Chuck who contributed P50,000.00; Ranier, P20,000.00;
Oscar, P40,000.00; Waldorf, P10,000.00; and Nelson, P5,000.00. No one was appointed as manager. Two
proposed contracts were voted upon by the partners during a meeting which took place as follows:
Contract I – Voting for approval of the contract were Chuck and Ranier; voting for rejection were
Oscar, Waldorf and Nelson.
Contract II – Voting for approval were Chuck and Ranier; voting for rejection were Oscar and
Waldorf; Nelson abstained.
Which of the following contracts are considered approved?
a. Both contracts.
b. Neither of two contracts.
c. Contract I only.
d. Contract II only.

34. MACK’s Restaurant is a partnership composed of Manalo, Alferez, Cancio and Kilayco, with Manalo
as the manager whose contribution is 80% of the firm’s capital. Manalo made Ongpauco his associate by
assigning one-half of his share in the firm to the latter. Did Ongpauco become a partner in the firm?
a. Yes, because Manalo is the manager.
b. No, because the other partners must give their consent in order that Ongpauco may be admitted in
the partnership.
c. Yes, because the assignment by Manalo of his share in the firm did not affect his ownership of the
controlling interest.
d. No, because the assignment by Manalo of his share in the firm diminished his interest in the
partnership.

35. A partner is a co-owner with his partners of specific partnership property. Such co-ownership:
a. allows a partner to assign his right in such a property.
b. allows a partner to use such property for partnership purposes.
c. entitles the spouse, children and other relatives of the partner to claim support from such property.
d. gives the private creditors of a partner to attach his right in such property.

36. SUMMER Laundry Services Company is a partnership composed of Ashton, Michael, Calum, Luke and
James. Without the knowledge of other partners, Ashton used a coat brought to the shop by a customer
for dry-cleaning in a party he attended. The coat was accidentally stained with food sauce during the
said party. Who will be liable to the customer for damages?
a. Ashton only since he used the coat without the knowledge of the other partners.
b. SUMMER Laundry Services Company and Ashton solidarily.
c. SUMMER Laundry Services Company and all the partners jointly.
d. SUMMER Laundry Services Company and all the partners solidarily.

37. A limited partner is prohibited on account of his claim against the partnership from performing the
following acts, except:
a. To receive or hold as collateral security any partnership property.
b. To receive from a general partner or the partnership any payment, conveyance or release from
liability, if partnership assets are not sufficient to discharge partnership liabilities to outside creditors.
c. Transact business with partnership.
d. None of the foregoing.

38. Louis, a limited partner in JUANDEE Company, Ltd., received the amount of P100,000.00
representing his contribution which was being returned on the date stipulated in the certificate.
Partnership records, however, showed that the firm had liabilities of P220,000.00 which arose before
Louis received the return of his contribution, and assets of only P90,000.00 after such return of
contribution.
a. Louis is bound to bring back to the partnership the amount of P100,000.00 plus interest thereon.
b. Louis is bound to give the partnership P220,000.00 plus interest thereon.
c. Louis is bound to give the partnership P130,000.00 plus interest.
d. Louis is not bound to return to the partnership any amount because he received the return of his
contribution pursuant to a contractual stipulation.
39. Barranda wrote Salvador a letter wherein he placed an order for a laptop computer worth
P80,000.00. In writing the letter, Barranda used a stationary which had for its letterhead “Barranda and
Bermudez, Real Estate Agents.” Bermudez is not really a partner of Barranda but they agreed to use the
said letterhead to give a semblance of bigness by making it appear that the two of them are partners.
Salvador delivered the laptop computer but Barranda defaulted in his payment of its price. Against
whom may Salvador proceed?
a. Barranda only since Bermudez is not his partner.
b. Barranda only since the purchase of the laptop computer is his personal transaction.
c. Barranda and Bermudez since they are partners in so far as Salvador is concerned.
d. “Barranda and Bermudez, Real Estate Brokers,” inly since an actual partnership was created between
Barranda and Bermudez and it has a personality separate and distinct from the two.

40. PARAGON Enterprises, a partnership engaged in garments manufacturing business, is composed of

partners Pacis, Ramas and Gonzales. During the year, PARAGON bought a computerized embroidering
machine amounting to P300,000.00 from Tadena with the following stipulation: down payment of
P50,000; balance to be paid in amount equal to 20% of the monthly net profits of PARAGON until the full
amount is paid.
a. Tadena is an actual partner of Pacis, Ramas and Gonzales during the same time that he receives as
share of profits of PARAGON as payment for the purchase price of the machine.
b. Tadena is only a partner by estoppel of Pacis, Ramas and Gonzales during the time that he receives a
share of the profits of PARAGON as payment of the purchase price of the machine
c. Tadena is not a partner of Pacis, Ramas and Gonzales whether before or after he has received the full
payment of the purchase price of the machine from PARAGON.
d. Tadena is a nominal partner of Pacis, Ramas and Gonzales during the time that he receives a share of
the profits of PARAGON as payment of the purchase price of the machine.

41. MAGIC Company is a partnership composed of Martha, Agnes, Glenda, Irene and Candice, with
Martha as manager who is authorized to collect the credits of the partnership. Theresa owes Martha
P4,000.00 which is due on December 10. She also owes MAGIC Company P6,000.00 which is due on
December 20. On December 15, Theresa tendered payment in the amount of P4,000.00 to Martha in
payment if her debt to the latter. Martha issued her own receipt acknowledging the payment.
a. The payment will be applied proportionately to the credits of MAGIC and Martha in the amount of
P1,600.00 and P2,400.00 respectively.
b. The payment will be applied in its entirety to Martha’s credit.
c. The payment will be applied in its entirety to MAGIC’s credit.
d. The payment will be applied equally to the two debts of Theresa.

42. Ornussa, the owner of a vacant lot, leased the same to Florida under an agreement that the rental
shall be paid by Florida at the rate of 10% of the annual net income of the flower business that she
would put up on the lot. A private agreement was signed by the parties. In the first year of operations,
Ornussa received from Florida the amount of P20,000.00 representing 10% of the net income of the
flower shop business.
a. Ornussa is a partner of Florida by her mere receipt of the share in the net profits of the flower
business of Florida.
b. The relationship of Ornussa and Florida is only that of a lessor and a lessee.
c. Ornussa and Florida have a dual contract: partnership and lease.
d. Ornussa and Florida are not partners; neither are they lessor and lessee because their agreement was
not in a public instrument.
43. Which of the following statements concerning the name of a partnership is false?
a. The partnership name may include the name of only one of the partners.
b. The partnership name may include the names of two or more, but not all of the partners.
c. The partnership name may include the name of all the partners.
d. The partnership cannot adopt a name which does not include the name at least one of the partners.

44. Donna, Emma, Alma and Rona are partners in DEAR Company with Donna as manager. Tricia owes
DEAR Company P5,500.00 and Donna, in Donna’s personal capacity, P4,500.00. Tricia’s debt to Donna is
secured by a pledge of her diamond ring. Both debts are already due. Tricia pays P4,500.00 to Donna
and tells her that the same is in payment of her debt to Donna. Donna, thus, issues her personal receipt.
a. The payment of P4,500.00 will be applied proportionately to the two credits: to the partnership credit
at P2,475.00; to Donna’s credit at P2,025.00. This is so because Donna should not place her interest
before that of DEAR Company.
b. The payment of P4,500.00 will be applied entirely to Donna’s credit.
c. The payment will be applied in partial payment of the partnership credit of P5,500.00; hence, there
will be a balance of P1,000.00
d. Tricia, Donna and DEAR Company will have to agree as to which the credit the payment shall apply.

45. Federico, Alberto, Sofronio and Teodoro are partners in FAST Motorcars Company, a dealer of car
spare parts. Federico, Alberto and Sofronio invested P500,000.00, P200,000.00 and P300,000.00,
respectively. Teodoro is an industrial partner who manages the partnership. The partners have
stipulated that Federico shall be exempt from liability to third persons. At the end of three years, the
assets of the partnership have dwindled to P220,000.00 while its liability to third persons have a balance
of P340,000.00. How much ultimately will be the share of each partner after payment to third persons
and the settlement among partners?
a. P30,000.00 for each partner.
b. Federico, P60,000.00; Alberto, P24,000.00; Sofronio P72,000.00; and Teodoro, none.
c. Federico, none; Alberto, P48,000.00; Sofronio P72,000.00; and Teodoro, none.
d. . Federico, none; Alberto, Sofronio and Teodoro P40,000.00 each.

46. The following partnership contracts were presented to you for evaluation:
I. A partnership engaged in the sale of office supplies with a capital of P100,000.00 broken down
into: cash, P30,000.00; office supplies for sale, P50,000.00 and office equipment, P20,000.00.
The agreement is in a private instrument.
II. The partnership engaged in the lease of office spaces with a capital of P700,000.00 broken
down into: land, P100,000.00; building, P500,000.00; cash, P80,000.00; and office equipment,
P20,000.00. The agreement is in a public instrument attached to which is the inventory of the
land and the building signed by the partners. The instrument is not recorded with the Securities and
Exchange Commission.
III. A partnership engaged in the trading of computers whose name is “Lamont Enterprises, Ltd.”
It has a total capital of P500,000.00 broken down into P100,000.00 cash and computers worth
P400,000.00, contributed by both general and limited partners. The agreement was subscribed
and sworn to by all the partners before a notary public but not recorded with the Securities and
Exchange Commission.

Based on the foregoing:

a. Each partnership has a separate juridical personality.
b. I and II have separate juridical personality.
c. II and III have separate juridical personality.
d. None of the partnerships has a separate juridical personality.

47. Belinda, Ara, Rica and Klaudia are partners in BARK Enterprises, a pet shop, with Belinda contributing
P50,000.00; Ara, P20,000.00; and Rica, P30,000.00. Klaudia is an industrial partner and manages the
partnership. Based on the foregoing information, which of the following statements is false?
a. Belinda may engage in the buying and selling of rice without the consent of other partners.
b. Klaudia may engage in the buying and selling of rice without the consent of other partners.
c. Klaudia is not liable for the losses of the partnership.
d. Klaudia may be held liable by third persons for partnership debts with her separate property.

48. Josephine, Ellen, Wilma, Edith and Lydia are partners in JEWEL Company, Ltd. Josephine, Ellen and
Wilma are general partners, Edith is a general-limited partner, while Lydia is a limited partner. Based on
the foregoing information, which of the following statements is false?
a. Josephine, Ellen and Wilma may be held liable with their separate property after the exhaustion of
partnership assets.
b. Edith may participate in the management of the partnership.
c. Edith may not be held liable with her separate property for partnership debts after the exhaustion of
partnership assets.
d. Lydia may not be held liable with her separate property for partnership debts after the exhaustion of
partnership assets.

49. Which of the following will not cause the automatic dissolution of a general partnership?
a. Death of a partner.
b. Insolvency of a partner.
c. When the partnership business becomes unlawful.
d. Insanity of a partner.

50. The partnership is not bound in three of the following acts of a partner after dissolution. However, it
is bound in one. Which is it?
a. Where the partner acting is insolvent.
b. When it is unlawful to carry on its business.
c. When the partner has no authority to wind up partnership affairs and the third person is a previous
creditor who had no knowledge of the partner’s lack of authority.
d. When a partner has no authority to wind up partnership affairs and the third person is a new creditor
who has not read the publication of the lack of authority of the partner in a newspaper of general
circulation in the place or places where the partnership is carried on.