Business Law and Regulations (PARTNERSHIP)
Just and equitable share
QUIZ 2 Reviewer
1. May be required to make additional
contribution in case of imminent loss
a. Capitalist partner
b. Limited partner
c. Industrial partner
d. a, b, and c
2. A, B and C, capitalist partners, each contributed
Php10,000 and D, the industrial partner
contributed his services. Suppose X is the
creditor of the firm amounting to Php90,000.
After getting the Php30,000 capital assets of the
partnership, which is correct?
a. X can recover Php20,000 each from A, B and C
only
b. X can recover Php60,000 from either A or B or C
c. X can recover Php15,000 each from A, B, C
and D
d. X can recover Php15,000 each from A, B and C
but D is exempt because he is an industrial
partner
3. Which of the following has no right to inspect
the partnership books?
a. Nominal partner
b. Silent partner
c. Secret partner
d. Dormant partner
4. X, Y, and Z form Y Partnership to engage in
import-export business. The partners agreed
that the profit will be divided on the following
ratio: X-20%, Y-30%, Z-50%, but no agreement
as to losses. After one year of operation, there
was loss of Php10,000. How will you apportion
this loss if the capital contributions are as
follows: X-Php20,000; Y-Php15,000; Z-Php5,000.
a. According to their capital contributions: X-
Php5,000; Y-Php3,750; Z-Php1,250
b. Equally among X, Y, and Z
c. X-Php2,000; Y-Php3,000; Z-Php5,000
d. A third party may be called to make the
distribution
5. In the absence of partnership agreement, what
is the share of the industrial partner in the net
loss of the partnership?
a. Equal to the share of the least capitalist partner
b.
c. Equally with all the partners whether capitalist
partners or industrial partners
d. None
6. S and G established a partnership by
contributing Php200,000 each. F, a classmate
allowed his name to be included in the firm
name of the partnership. The partnership was
insolvent and after exhausting all the remaining
assets, there remains a liability to third persons
amounting to Php30,000. The creditor can
compel
a. Either S or G or F to pay the Php30,000 liability
b. Either S or G to pay the Php30,000 liability
c. S and G to pay Php15,000 each
d. S, G and F to pay Php10,000 each
7. A, B and C formed a Universal Partnership of
Profits. The partners contributed the following:
A - 20 sewing machines; B - 14 Furniture &
Fixtures; C - 4-storey building The parties
agreed that only the use and fruits of the
objects contributed shall pertain to the
partnership. Which of the following statements
is true?
a. The partnership upon delivery shall be the owner
of the objects contributed
b. Upon dissoultion, the objects shall be converted
into cash and the proceeds shall be divided
equally among the partners including fruits
c. During the term of the partnership, the
contributing partner remains to be naked owner
of the object contributed but upon dissolution
all objects contributed are to be converted into
cash and proceeds shall be divided equally
among the three partners
d. During the term of partnership, the loss of
the objects contributed shall be borne by the
partners concerned
8. What is the prescriptive period for a partner to
file an action to impugn or question the
manifestly inequitable sharing of partnership
profits or losses designated by a third person?
 a. Within 3 months from the knowledge of such
designation but it must be before the said
partner executes it.
b. Within 2 months from the knowledge of such
designation but it must be before the said
partner executes it
c. Within 1 month from the knowledge of such
designation but it must be before the said
partner executes it.
d. Within 1 month from the knowledge of such
designation but it must be before the said
partner executes it.
9. A, a managing partner is B’s creditor to the
amount of Php1,000 already demandable. B
also owes the partnership Php1,000, also
demandable. A collects Php1,000 from B. One is
not correct.
a. If A gives a receipt for the partnership it is the
partnership’s credit that has been collected
b. If A gives a receipt for his own credit, it is A’s
credit that has been collected
c. If A gives a receipt for his own credit, Php500
will be given to him, Php500 to the partnership
d. B may decide that he is paying only A’s credit if
the personal credit of A is more onerous to B
10. Three of the following are rights of a partner,
which one is not? Right to
a. associate another person to his share
b. admit another partner
c. inspect and copy partnership book
d. ask dissolution of the firm at the proper time
11. How shall the profits and losses of the
partnership be distributed among the partners?
a. It should be divided equally.
b. It should be divided according to their profits
and losses sharing agreement
c. It should be divided proportionately
accordance to the capital contribution
12. A, B, and C are partners contributing services,
Php20,000 and Php40,000, respectively. The
distribution of Php80,000 profit shall be:
a. A = Php20,000; B = Php20,000; C =
Php40,000
b. A = Php5,000; B = Php25,000; C = Php50,000
c. A = Php32,000; B = Php16,000; C = Php32,000
d. A = Php26,667; B = Php26,667; C = Php26,667
13. FAZE General Partnership consists of partners F,
A, Z and E who contributed P3M, P2M, P5M and
industry, respectively. The Articles of Co-
Partnership provides that Z is exempted from
the unpaid obligations of the partnership to its
creditors in case of insolvency of the
partnership. After several years of operation,
FAZE General Partnership became bankrupt. At
this moment, the partnership reported total
assets amounting to P300,000 while its total
liabilities amounted to P400,000. Assuming all
partners are personally solvent, how much may
the unpaid creditors of FAZE General
Partnership collect from the separate assets of
partners F, A, Z and E, respectively?
a. P30,000 – P20,000 – P50,000 – P0
b. P60,000 – P40,000 – P0 – P0
c. P33,333.33 – P33,333.33 – P33,333.33 – P0
d. P25,000 – P25,000 – P25,000 – P25,000
14. Which of the following should first be
considered in determining how profits and
losses shall be distributed?
a. Agreement
b. Whether the partners are capitalist or industrial
c. Amount of capital contribution
d. Amount of interest in the partnership
15. 1st Statement: In the absence of stipulation, the
share of each partner in the profits and losses
shall be equal to each other.
2nd Statement: A stipulation which excludes
one or more partners from any share in the
in profits or losses is void, as a general rule.
a. Both statements are true
b. Both statements are false
c. Only the 1st Statement is true
d. Only the 2nd Statement is true
16. The managing partners may be appointed:
 a. Only in the Articles of Partnership
b. Only after the constitution of Partnership
c. Either in the Articles of Partnership or after
constitution of Partnership
d. In the Articles of Partnership and after
constitution of the Partnership
17. In the absence of agreement as to the sharing
of losses, how shall a capitalist-industrial
partner share in partnership losses?
a. He shall share on the basis of profit agreement
ratio.
b. He shall receive an equal share in losses.
c. He shall receive the lowest share received by a
capitalist partner
d. For being an industrial partner, he shall not
share in losses but for being capitalist partner
he shall share in the losses on the basis of
profit ratio.
18. A, B, and C are partners contributing services,
Php40,000 and Php80,000, respectively. The
distribution of Php60,000 loss shall be:
a. A = Php15,000; B = Php15,000; C = Php30,000
b. A = Php20,000; B = Php20,000; C = Php20,000
c. A = Php0; B = Php20,000; C = Php40,000
d. A = Php0; B = Php30,000; C = Php30,000
19. C and I entered into a contract of partnership
for a fixed term of two years. C, a capitalist
partner and I, an industrial partner agreed with
the following profit or loss sharing terms. I will
share equally in the profit and there is no
agreement as to losses. On 2020, the
partnership had P10,000 net loss. On 2021, the
partnership had P20,000 net income. Upon
examination of the contract, it was determined
that the word profit is really intended by the
partners as cumulative profit. How much shall
be received by I as his share for the two years of
partnership operation?
a. P10,000 because industrial partner does not
share in the losses
b. P5,000 because the year 2020 P10,000 net
loss shall be netted from year-2021 P20,000
net income before distribution
c. Zero because industrial partner has no
investment
d. P20,000 because he is an industrial partner.
20. Statement 1: Partners representing the
controlling interest are authorized to enter into
a compromise concerning a partnership claim
or liability.
Statement 2: Partners representing the
controlling interest are authorized to dispose of
the goodwill of the business.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both Statements are true
d. Both Statements are not true.
21. A, B and C are partners in a joint venture
engaged in real estate and land development.
A, without the knowledge of B and C offered to
sell to D all the remaining unsold lots at a price
very much higher than the prevailing market
prices. Later, A bought out B and C from the
partnership and thereafter finally sold all the
lots at very big profits.
Statement No. 1: When A bought out B and C
from the partnership, the partnership was
dissolved so B and C have no more share in the
profit of the sale.
Statement No. 2: The sale of the lots between A
and D is void because it was without the
knowledge and consent of B and C.
a. Both Statements are true
b. Both Statements are false
c. Statement No. 1 is true while Statement No. 2 is
false
d. Statement No. 1 is false while Statement No. 2 is
true
22. A, B and C are partners in ABC Parking General
Partnership. D deposited his car to the parking
lot of the partnership for a fee while A is
managing the parking lot. After seeing D's
parked car, B borrowed the said car.
Unfortunately, the car was crushed by an
accident. Who will be liable for the value of the
car to D?
a. ABC Partnership only
 b. ABC Partnership or B only
c. ABC Partnership or A or B or C
d. ABC Partnership or A or B only
23. Statement No. 1: Partners representing the
controlling interest are authorized to enter into
a compromise concerning a partnership claim
or liability.
Statement No. 2: Partners representing the
controlling interest are authorized to dispose of
the goodwill of the business.
a. Only Statement No. 1 is true
b. Only Statement No. 2 is true
c. Both Statements are true
d. Both Statements are not true
24. A partner can engage in business for himself
without the consent of his co-partners if he is
a. A capitalist partner whether or not the business
he will engage in is of the same kind as or
different from the partnership business
b. An industrial partner whether or not the
business he will engage in is of the same kind as
or different from the partnership business
c. A capitalist partner and the business he will
engage in is of a kind different from the
partnership business
d. An industrial partner and the business he will
engage in is of a kind different from the
partnership business
25. In the absence of agreement as to the sharing
of profits, how shall industrial partner share with
it?
a. The industrial partner shall share on the basis of
loss agreement ratio.
b. The industrial partner shall receive an equal
share in profit.
c. The industrial partner shall receive the lowest
share received by a capitalist partner.
d. The industrial partner shall first receive a just
and equitable share in the profits before
distribution to capitalist partners.
26. Statement 1: Any stipulation against individual
liability of the partners is valid against third
persons.
Statement 2: Any stipulation against individual
liability of the partners is void among the
partners.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both Statements are true.
d. Both Statements are not true.
27. In the absence of agreement as to the sharing
of profits, how shall a capitalist-industrial
partner share in partnership profits?
a. He shall share on the basis of loss agreement
ratio.
b. He shall receive an equal share in profit.
c. He shall receive the lowest share received by a
capitalist partner
d. He shall receive a just and equitable share in
the profit for being an industrial partner and
then he shall also share in the remaining
profits as a capitalist partner on the basis of
capital contribution ratio.
28. D has two outstanding and matured obligations
to ABC Partnership and A, managing partner of
ABC Partnership in the amount of P4,000 and
P1,000, respectively. D paid P1,000 to A who
issued his personal receipt. How shall the
P1,000 be applied to the credits?
a. P1,000 to A's credit only
b. P1,000 to ABC Partnership's credit only
c. P800 to ABC Partnership and P200 to A's
credit
d. P500 to ABC Partnership and P500 to A's credit
29. A and B put up a partnership to engage in
distribution of books and school supplies. A
contributed Php1M while B his services. A wants
to put up a restaurant on the opposite side of
the street. On the other hand, B wants to have a
bakery beside A’s restaurant. Which of the
following is correct?
a. A may put up his restaurant without need of
securing B’s consent
b. B may put up his bakery without need of
securing A’s consent
 c. Both A and B can put up their restaurant and
bakery businesses without the need of securing
each other’s consent
d. Neither A nor B can put up another business
30. When the manner of management is not
agreed upon:
a. The party who has the controlling interest will be
considered as the agent of the partnership.
b. All capitalist partners will be considered as
agents of the partnership.
c. All industrial partners will be considered as
agents of the partnership.
d. All partners will be considered as agents of the
partnership.
31. If a partner assigns his interest in the
partnership to his personal creditor or to a third
person for value, the assignee acquires the right
to
a. demand an accounting of partnership affairs
b. inspect the books and records of the partnership
c. receive the partner-assignor's share of the
profits
d. interfere in the management of the partnership
e. none of the above
f. all of the above
32. Which of the following partnership profit/loss
stipulation is valid?
a. Stipulation excluding any capitalist partner from
share in partnership profit
b. Stipulation excluding any industrial partner from
share in partnership profit
c. Stipulation excluding a capitalist partner from
share in partnership loss
d. Stipulation excluding an industrial partner from
share in partnership loss
33. The partnership can recover real property
conveyed by any partner in the name of
partnership when:
a. The grantee does not have knowledge that
the partner exceeded his authority and the
grantee is a holder for value.
b. The partner has authority to carry out the usual
business of the partnership.
c. The real property has been conveyed by the
grantee to a holder for value.
d. The person claiming the right under the grantee
does not know that the partner has exceeded his
authority.
34. The partnership shall bear the risk of loss for the
following contributions of partners, except:
a. Fungible things or those that cannot be kept
without deteriorating.
b. Things contributed to the partnership to be sold.
c. Things brought and appraised in the inventory
of partnership unless there is a stipulation to the
contrary but the amount of partnership
obligation will be limited to the value at which
they were appraised.
d. Specific and determinate things owned by a
partner which are not fungible, contributed
to the partnership so that only their use and
fruits may be for the common benefit such as
property brought by partners in case of
universal partnership of profits.
35. Andrea, John Lloyd, and Ellen are partners of
AJE Partnership. AJE Partnership had a long-
time supplier named Derek. Derek made his
payment for the merchandise he brought to
Ellen for Php300,000, considering that for years,
it was Ellen who had collected the amounts with
no problems. However, Ellen used the funds for
her European tour. Can the partnership recover
from Derek?
a. No, the partnership is liable for loss because
Ellen was acting within the scope of her
apparent authority.
b. Yes, Derek is liable for loss because Ellen was
acting within the scope of her apparent
authority.
c. No, the partnership is liable for loss because
there was no showing that Ellen was not
authorized to collect from Derek.
d. Yes, Derek is liable for loss because Derek should
have known that Ellen was not authorized to
collect from Derek.
36. A, B and C are capitalist partners, each
contributed Php10,000. After exhausting the
assets of the firm, the firm’s indebtedness
 amounts to Php90,000. It was stipulated that A
would be exempted from liability. Which is
correct?
a. A may recover his original capital of Php10,000
b. The creditors may collect Php30,000 each
from A, B and C
c. A can recover Php20,000 each from B and C
should he be required to pay the creditors
d. The creditors can recover Php45,000 each from B
and C
37. In the partnership of A, B, C, and D, D was
designated as the managing partner. D's able
management prevented the firm to suffer from
economic turbulence caused by the instability
of the Philippine peso. Partners A, B and C
became jealous of D's good name. As a result, D
was capriciously and whimsically removed as
manager without valid cause. Is the removal
valid?
a. Yes, D's removal is valid even without his
consent
b. Yes, provided it is approved by all the other
partners
c. No, D's appointment is irrevocable without a just
or lawful cause
d. No, D can only be removed for a valid cause
with vote of the partners owning controlling
interest
a. Managing partner
b. Liquidating partner
c. Ostensible partner
d. Partner by estoppel
40. A, B, C, and D are general partners contributing
Php20,000, Php30,000, Php50,000 and industry,
respectively. At the time of liquidation, the
partnership is indebted to Y for Php50,000, to
partner A for Php30,000 and to partner B for
Php20,000. If the assets of the partnership
amount only to Php20,000, which of the
following is correct?
a. Y can collect Php20,000 from the partnership
and from partners A, B and C at Php10,000 each.
b. After exhausting the assets of the partnership
amounting to Php20,000, Y can collect from
partners A, B, C and D at Php7,500 each.
c. Y can collect Php20,000 from the partnership
and Php30,000 from either partners A or B or C
or D.
d. If Y succeeds in collecting the Php30,000 from
the separate properties of the partners
concerned, partners A, B and C will be
required to make additional contribution.

38. How shall the partnership profit of a partnership

be divided?
a. It shall be divided based on any partnership
profit agreement.
b. It shall be divided based on any loss agreement.
c. It shall be divided based on a valid
partnership profit agreement.
d. It shall be divided equally.

39. A, B and C are partners in CAB Enterprises. Not

having established yet their credit standing, the
three partners requested D, a well-known
businessman, to help them negotiate a loan
from E, money lender. With the consent of A, B
and C, D represented himself as a partner of
CAB enterprises. Thereafter, E granted a loan of
Php150,000 to CAB Enterprises. What kind of
partner is D?