QUIZ #1 REVIEWER 9.
Which of the following best describes the attributes of a
1. If new partnership books are to be used by X and Y partnership, a
closing entry shall be made in the books of: ANSWER: X and Y
2. The Articles of Co-Partnership should contain clear provisions on
all of the following except: ANSWER: taxes paid by the
partnership.
3.
4.
5. The non-cash contribution of the partners to form a partnership are
recorded by the partnership at their: ANSWER: Agreed Value
6. When a partner takes cash out of the partnership, the partner’s:
ANSWER: drawing account is debited.0
7.
8. Assets and Liabilities contributed by a partner to a partnership are
recorded at: ANSWER: Agreed Value
partnership? ANSWER: Unlimited life of the business and
limited liability of partners.
10. The transfer of accounts receivable into the partnership books is
recorded: ANSWER: at gross amount together with its
allowance account.
11.
12. When a partner withdraws cash or other assets, the drawing
account is: ANSWER: Debited
13.
14. A partner who takes active part in the business but whose
connection with the partnership is concealed to the public is known
as a (an): ANSWER: Secret Partner
15.
16. Two individuals who were previously sole proprietors formed a
partnership. Property other than cash which is part of the initial
 investment in the partnership would be recorded for financial 2. When the intention of the partners is to make the profits or loss a
accounting purposes at the: ANSWER: Fair value of the property part of the permanent capital, the balance of the Income and
at the date of the investment. Expense Summary account is closed to the capital account. TRUE
17. When a partnership cannot pay its debts with business assets, the 3. Any salary allowances stipulated in the partnership agreement are
partners: ANSWER: Must be their personal assets to meet the considered only if profit is sufficient to cover such allowances.
debts. FALSE
4. Unless otherwise agreed, allowance for salaries and interest are
allowed to partner whether there is a profit or loss, whether the
profit is sufficient or insufficient. TRUE
5. All partnerships, just like corporations, are subject to income tax.
FALSE
6. Allowance for salaries and interest in a partnership agreement are
methods of allocating profits and losses to the partners. TRUE
7. Distribution of profits on the basis of capital ratios recognizes the
differences in capital contribution. TRUE
18. 8. The salary to partners and/or the interest on their capital can still be
distributed in accordance with what has been agreed upon by the
partners even if the net income is not adequate. TRUE
9. If the partners did not agree as to how profits is to be divided, then
such should be divided among the partners equally. FALSE
10. The percentage of interest in a partnership is always the same as
the profit-sharing ratio. FALSE
11. An industrial partner is exempt from sharing in partnership losses.
TRUE
19.
12. An adequate accounting system and an accurate measurement of
income are not needed by a partnership because the profit is
divided among two or more partners. FALSE
13. Salaries and interests and bonuses allowed to partners as
distribution of partnership profits are treated as partnership
expenses. FALSE
14. With net income of P20,000, bonus rate of 10% and tax rate of
32%, the bonus is 10% of net income before deducting bonus, but
after deducting income tax, it is P2,000. TRUE
20. 15. If the partners have not drawn up any agreement, then they must
share profits and losses. – According to capital contribution
QUIZ #2 REVIEWER 16. Partnership income and losses are usually divided on the basis of
True or False interest, salaries, and stated ratios because: - Partners seldom
1. A credit balance in the Income Summary account represents profit contribute time and resources equally
after closing into it all the operating (nominal) accounts. TRUE
17.

18.
19. Details of the division of net income for a partnership should be
disclosed – In the statement of cash flows
20. In a partnership, partner’s salaries are considered as: - An
allocation of profits and losses
21. The capital account is debited for – Share in losses
22. If there is no written agreement as to the way income will be
divided among partners. – They will share income and losses
according to their capital balances

QUIZ #3 REVIEWER

1. The withdrawal of an existing partner dissolves the partnership; but
the addition of a new partner does not. FALSE
2. The admission of a new partner does not require the unanimous
consent of all the partners. FALSE
3. Both asset revaluation and bonus affect total assets and total
capital. FALSE
4. The sale of a partner’s interest in an existing partnership is a
personal transaction between the selling partner/s and the buying
or new partner. TRUE
5. Accounting for the withdrawal of a partner when one of the
remaining partners buys the retiring partner’s interest is not the
same as when an outside person buys a retiring partner’s interest.
FALSE
6. The partnership must measure net income or net loss for the
fraction of the year up to the withdrawal date of withdrawing partner
and allocate profit or loss according to the existing ratio. TRUE
7. A new partner may be admitted without an investment and without
the recognition of capital interest. FALSE
8. The agreed capital can never be less than the total contributed
capital. FALSE
9. In the admission of a new partner by purchase, the new partner
may pay more than, less than or equal to the book value of the
interest sold by any or all of the old partners. TRUE
10. The retirement of a partner from the partnership requires the
unanimous consent of all the partners. FALSE
11. Admission of a new partner by purchase of interest is a personal
transaction between the selling partner and the buying partner.
Hence, any indicated gain in the transaction is not recognized in
the partnership books. TRUE
12. The allocation of asset revaluation among the existing partners
should be equally FALSE
13. A partner who desires to withdraw from the partnership may,
without the consent of the other partners, sell all or part of his
interest either to an outsider, to the other partners, or to the
partnership itself. FALSE
14. The death of a partner transfers his entire interest to his estate prior
to settlement by the partnership. TRUE
15. When a new partner enters an existing partnership by purchasing a
partner’s interest, the cash paid to the selling partner for the
partnership interest is always equal to the new partner’s capital
balance. FALSE
16. A bonus given to the old partners by a new partner increases the
capital account balances of the old partners. TRUE
17. The account name used to accumulate changes in asset and
liability accounts from the last balance sheet to the date of
dissolution is – Capital adjustment account
18. If the total contributed capital exceeds the total agreed capital with
the new partner’s investment is the same as his capital credit, then
the admission of the new partner involved a – Negative asset
revaluation
19. A partner who withdraws his interest at book value receives assets
– equal to his capital interest
20. When Faith retired from the partnership with Hope and Love, the
final interest is less than Faith’s capital balance. Under the bonus
method, the difference – increases the capital balances of Hope
and Love
21. If the capital credit of the new partner is less than his contribution
with no adjustment in asset values, then the admission resulted in a
– bonus to the old partners
22. A change in the structure of the partner’s equity results to –
dissolution
23. Faith and Hope are partners with a capital ratio of 3:1 and a profit
and loss ratio of 2:1, respectively. The bonus method was used to
record Love’s admittance as a new partner. What ratio should be
use to allocate to Faith and Hope the excess of Love’s contribution
over the amount credited to his capital account? – Faith and
Hope’s old profit and loss ratio
24. Pablo and Esther are partners with a capital ratio of 3:1 and a profit
and loss ratio of 2:1, respectively. The bonus method was used to
record Love’s admittance as a new partner. What ratio should be
use to allocate to Pablo and Esther the excess of Love’s
contribution over the amount credited to his capital account? –
Pablo and Esther’s old profit and loss ratio