Partnership and Corporation Quiz 1

SY 2022-2023
Basic Considerations and Partnership Formation
Quiz Proper.  Multiple Choice.  Select the best answer.
Good luck!  Honesty is the best policy!
3.Which of the following statements is correct?
The limited partner may contribute services to the partnership.
The general partner is liable to unpaid partnership liabilities up to extend of his personal and
separate property.
A secret partner is one who takes active part in the business activities of the partnership
although he is not known as a partner.
All of the above
None of the above
4.A partner contributed a used three-year old machinery in the partnership.  The
machinery had original cost P1,000,000 with accumulated depreciation P300,000. 
At the time the machinery is contributed to the partnership, the fair value is
P750,000.  The partners agreed that the value of the machinery will be P775,000. 
What will be the assigned value of the machinery in the books of the partnership?
P1,000,000
P   775,000
P   750,000
P   700,000
P   300,000
5.Which of the following statements is INCORRECT?
A contract of partnership is valid whenever movable property is contributed and no signed
inventory of said property is made and attached to a public instrument.
When the partnership capital is P3,000 or more, the contract of partnership is valid even it is not
registered in the Securities and Exchange Commission.
If there are five partners, the maximum partners' equity accounts is eleven.
All of the above
None of the above
6.Cruz and Santos agreed to form a partnership on August 1, 2022.  Cruz
contributed P20,000 cash and furniture and equipment with carrying amount
P15,000.  Santos contributed P30,000 cash, Inventory P15,000 at cost and
Building with carrying amount P40,000.  The building is subject to a mortgage of
P10,000, which the partnership agreed to assume.  Profits and losses will be
divided equally.  What amounts should be recorded as capital for Cruz and
Santos at the formation of the partnership?  
Cruz P35,000; Santos P85,000
Cruz P35,000; Santos P75,000
Cruz P55.000; Santos P55,000
Cruz P60,000; Santos P60,000
None of the above
7.Maria and Jose formed a partnership on September 1, 2022.  Maria contributed
P1,260,000 cash and computer equipment that cost P540,000.  The fair value of
the computer equipment is P360,000.  Maria has notes payable to the computer
of P120,000 to be assumed by the partnership.  Maria is to have 60% capital
interest in the partnership.  Jose contributed P900,000 cash only.  The partners
agreed to share profits and losses equally.  Maria should make an additional
investment or withdrawal of
Investment P600,000
Withdrawal P600,000
Investment P150,000
Withdrawal P150,000
None of the above