XAVIER UNIVERSITY (ATENEO DE CAGAYAN)

QUIZ
Accounting 3.1 (Partnership & Corporation Accounting)
Name: ___________________________________ Section: Ac 3.1 AC___

Test 1 : Multiple Choice 20 points (Write the letter of your answer on the space provided.)
1) A partner who contributes his work, labor or industry to the common fund of the
partnership is called
a) limited partner. b) capitalist partner.
______ c) industrial partner. d) managing partner.
2) The partner’s capital account is credited in the following cases except when it involves the
recording of the
a) share in profit. b) additional investment.
_______ c) original investment. d) debit balance of the drawing
account at the end of the period.
3) Non-cash assets invested into a partnership are recorded at
a) their fair market value b) their original cost.
_______ c) their carrying value. d) zero.
4) In a limited partnership,
a) all partners have limited liability. b) all but the general partners have
limited liability.
_______ c) all but the general partners have d) the general partners have limited
unlimited liability. liability.
5) A partnership records a partner’s investment of non-cash assets in the business at
a) the market value of the non-cash b) a value set by the partners.
assets invested.
_______ c) the partner’s book value of the d) any of the above.
non-cash assets invested.
Test 11: Formation 80 points (Use columnar sheet.)
The financial position of PINAS COMPANY on 01 October 2010 before accepting PINOY as his
partner is shown below:
Pinas Company
Statement of Financial Position
01 October 2010
Assets Liabilities and Owner’s Equity
Cash P 6.000 Accounts Payable P 10,000
Notes Receivable 3,000 Notes Payable 4,000
Accounts Receivable 24,000 Pinas, Capital 31,400
Allowance for Bad Debts ( 1,000)
Merchandise Inventory 8,000
Furniture & Fixtures 6,000
Accumulated Depreciation ( 600)
Total Assets P 45,400 Total Liabilities/Equity P 45,400
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PINOY offers to invest cash to give him a capital credit equal to one-half (1/2) of PINAS’s
capital after giving effect to the adjustment of the items below. PINAS accepts the offer.
a) The merchandise is to be valued at P7,400.
b) The accounts receivable is estimated to be 95% realizable.
c) Interest accrued on the notes receivable enumerated below is to be reflected:
P1,000, 6% dated 01 July 2010.
P2,000, 6% dated 01 August 2010.
d) Prepaid expenses of P3,200 and accrued expenses of P1,200 are to be recognized.
e) Office supplies on hand which have been charged to expense in the past amounted to
P400. These are still to be used by the partnership.
Required:
1) Journal entry to adjust the book of PINAS.
2) Closing entry to close the book of PINAS.
3) Opening entry to record the formation of the partnership.
4) Statement of financial position of the partnership on formation date (account form).

(End of Examination)
das2010-11Q1