PARCOR PRE-MID QUIZ

1. Withdrawals of assets from a business by the owners are considered to be expenses.

FALSE
2. Recoding P52, 000 as P520 is an example of a slide error. TRUE
3. An increase in a expense is recorded as a debit. TRUE
4. When payment is received for services not yet rendered, no entry is recorded until that
service has been rendered. FALSE
5. A debit entry always decrease the balance of an account. FALSE
6. A cash acquisition of a laptop computer will cause total assets to increase. FALSE
7. The differences between the cost of an asset and the accumulated depreciation for that
asset is book value. TRUE
8. Journal entries recorded at the end of each accounting period to prepare the revenue,
expenses, and withdrawals accounts for the upcoming period and to update the owner’s
capital accounts for the events of the period just finished are referred to as updating
entries. FALSE
9. A decrease in liability is recorded by a debit. TRUE
10. The normal balance of any account refers to the side of the account – debit or credit –
where decreases are recorded. FALSE
11. A partner usually retains title to assets contributed to a partnership, so that certain assets
may be identified as belonging to a given partner. FALSE
12. The basis of valuation for non-cash investments should be at values agreed upon by the
partners. TRUE
13. Liabilities related to assets invested in a partnership by a partner cannot be transferred to
the partnership. FALSE
14. In a limited partnership, the general partner’s liability is limited to his investment.
FALSE
15. A partnership has no power of succession. TRUE
16. An advantage of a partnership over sole proprietorship is when there is net loss because it
can be shared among partners. TRUE
17. Work or services, whether personal, manual or intellectual efforts, cannot be contributed
to the partnership. FALSE
18. A De jure partnership is established and organized in accordance with all the legal
requirements for its existence. TRUE
19. The partner who is appointed to administer the realization and distribution of assets after
dissolution is called managing partner. FALSE
20. Loans to partners are receivable from partners. TRUE