Professional Documents
Culture Documents
Abm Quiz
Abm Quiz
Name:
Section:
Multiple Choice
Direction: Write the letter of the correct answer before each number.
1. A partner who takes active part in the business but whose connection with the partnership is concealed to the public is known
as:
a. Silent Partner
b. Secret Partner
c. Nominal Partner
d. Ostensible Partner
2. 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
3. The partners capital amount is credited in the following cases except when it involves the recording of the
a. Additional investment
b. Original investment
c. Share in profit
d. Debit balance of the drawing account at the end of the period
4. In the absence of agreed value, the non-cash contributions of the partners to form a partnership are recorded by the
partnership at:
a. Book Value
b. Fair Value
c. Salvage Value
d. Historical/Original Value
8. Michelle, an active partner in the Michelle-Esme Partnership, receives an annual bonus of 25% of the partnership income
after deducting the bonus. For the year ended December 31, 1992, the partnership income before the bonus amount to
P240,000. The bonus of Michelle for the year 1992 is
a. P45,000 c. P60,000
b. P48,000 d. P80,000
9. On June 1 20x9, S and T pooled their assets to form a partnership, with the firm to take over their business assets and assume
the liabilities. Partners capitals are to be based on the assets transferred after the following adjustments:
T’s inventory is to be increased by P3,000.
An allowance for bad debts of P1,000 and P1,500 are be set up on the books of S and T, respectively.
Accounts payable of P4,000 is to be recognized in S’s books.
An amount of cash must be contributed by any one of the partners in order to establish equal amount of interest.
The following balances appear on S and T’s individual books on June 1, before adjustments:
Assets Liabilities
S P 75,000 P 5,000
T 113,000 34,500
How much capital must be credited to S?
a. P65,000
b. P81,500
c. P80,000
d. P77,000
10. Partners Gretchen and Kristine agree that Kristine is to receive a P15,000 salary from their partnership and remaining profits
are to be divided in a 3:2 ratio. If Kristine receives a total share of P36,000, how much is the partnership profits?
a. P90,000
b. P75,000
c. P67,500
d. P60,000
12. The admission of a new partner under the bonus method will result in
a. Bonus to the old partners only.
b. Bonus to the new partners only.
c. Bonus to either the new partner or the old partners, but not both.
d. None of the above
13. The partnership contract for Hans and Jon LLP provides that Hans is to receive a bonus of 20% of net income (after the
bonus) and that the remaining net income is to be divided equally. If the partnership income before the bonus for the year is
P57,600, Hans’ share of this pre-bonus income is:
a. P28,800.
b. P33,600.
c. P34,560.
d. P43,200.
14. When Danny withdrew from John, Daniel, Harry, and Danny LLP, he was paid P80,000, although his capital account balance
was only P60,000. The four partners shared net income and losses equally. The journal entry of the partnership to record
Danny's withdrawal preferably should include :
a. P6,667 debit to John, Capital.
b. P6,667 credit to John, Capital.
c. P5,000 debit to John, Capital.
d. P5,000 credit to John, Capital.
15. Manuel, James and Will shared profits and losses 20%, 40%, and 40% respectively and their partnership capital balance is
P10,000, P30,000 and P50,000 respectively. Manuel has decided to withdraw from the partnership. An appraisal of the
business and its property estimates the fair value to be P200,000. Land with a book value of P30,000 has a fair value of
P45,000. Manuel has agreed to receive P20,000 in exchange for her partnership interest. What amount should land be
recorded on the partnership books?
a. P20,000. c. P45,000
b. P30,000. d. P50,000
16. A summary of Yambao capital account for the year ended December 31, 2008, is as follows:
Balance, January 1 420,000
Additional investment, July 1 120,000
Withdrawal, August 1 (45,000)
Balance, December 31 495,000
a) 475,500 c) 461,250
b) 495,000 d) 517,500
17. Mary, Maria and Mario are partners with average capital balances during 2008 of P360,000, P180,000, and P120,000,
respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P90,000 to Mary and
P60,000 to Mario, the residual profit or loss is divided equally. In 2008, the partnership sustained a P99,000 loss before
interest and salaries to partners. By what amount should Mary’s capital account change?
The capital balances of Aragorn, Gimli and Legolas in Ring Partnership on September 30, 2007 is as follows:
18. How much will Gandalf invest to give him 20% interest?
a) 120,000 c) 90,000
b) 72,000 d) 60,000
19. If Gandalf purchase ¼ interest in the partnership for P100,000, what will be the capital balance of Gimli after the admission?
a) 75,000 c) 90,000
b) 84,000 d) 78,000
20. If Gandalf invest P120,000 for ¼ interest, what will be the capital balance of Gimli after the admission?
a) 100,000 c) 120,000
b) 80,000 d) answer not given
21. If Gandalf invest P100,000 for 1/5 interest, what will be the capital balance of Aragorn after the admission?
a) 200,000 c) 203,200
b) 216,000 d) 208,000
22. Statement 1: In partnership liquidation, one partner may have to make up for the deficit in another partner’s account.
Statement 2: A partnership may be dissolved without being liquidated but liquidation is always preceded by dissolution.