NAME: BLOCK NO:

1.) When a new partner invests more than the proportionate share he receives in the partnership, a
bonus is recorded to his account.
2.) A partnership may be dissolved without being liquidated.
3.) The dissolution of the partnership discharges the existing liability of any partner.
4.) A new partner must have the consent of all the partners before being admitted into the
partnership
5.) A partner who withdraws from a partnership is always entitled to the balance in his capital
account
6.) The assets invested into the partnership and not given to the individual to the individual partners
increases the total assets of the partnership
7.) Partnership dissolution is synonymous with partnership liquidation.
8.) When the existing partners pay a bonus to a newly admitted partner, the existing partners'
accounts are debited.
9.) Admission of a new partner either by purchase or by investment in the partnership will result to
dissolution of the existing partnership.
10.)Admission of a partner by purchase of interest is a personal transaction between the selling
partner and the new or buying partner.
11.) The admission of a new partner by investment in the partnership will not increase partnership
capital after admission.
12.)In admission by purchase of interest, the total assets, total liabilities, and total partners' equity of
the partnership are not affected upon admission
13.)Total contributed capital is the sum of the capital balances of the old partners, and the actual
investment of the new partner
14.)If the partnership is dissolved with the death of one of the partners, the remaining partners may
continue the business based on a new contract.
15.)In admission by purchase of interest, gain or loss arising from the sale of interest is recorded in
the partnership books.
16.)The equity of a partner in the net assets of the partnership is different from the partner's share in
profits or losses.
17.)The basis on which profits or losses are shared is a matter of agreement among the partners and
may not necessarily be the same as their capital contribution ratio.
18.)Dissolution causes the termination of the partnership.
19.)The amount of money that the buying partner pays to the selling partners will go to the
partnership and not to the partners concerned
20.)The retirement of a partner by payment from partnership assets may cause the other partners’
capital accounts to decrease.
21.)The partners cannot change their original profit and loss ratio if it is stipulated in the original
partnership agreement.
22.)Total partners’ equity will not change when a withdrawing partner sells his interest to a new or
remaining partner.
23.)Negative capital balance of a partner results in the dissolution of the partnership.
 24.)
Before the effectivity of dissolution, assets and liabilities should be restated at ther
a. realizable values
b. liquidating values
c. fair market values
d. historical values
25.)
Which of the following results in the dissolution of a partnership
a. The contribution of additional assets to the partnership by an existing partner
b. The receipt of share in profit by an existing partner
c. The withdrawal of a partner from a partnership
d. The winding up of the partnership and the distribution of remaining assets to the partners
26.)
Which of the following will not reult in dissolution of a partnership?
a. Incapacity of a partner
b. Bankruptcy of a partner
c. Negative capital balance of a partner
d. Admission of a new partner
27.)
Upon dissolution, the partners may agree to adjust the partnership assets and liabilities. The net
effect of such restatement of partnership assets and liabilities must be adjusted to the respective
partners' capital balances based on their
a. Ending capital balances
b. Old profit and loss ratio
c. New profit and loss ratio
d. Beginning capital balances
28.)
Which of the following best describes the admission of a new partner by investing an amount
more than his capital credit under bonus method?
Net Assets Total Capital

a. No Effect Increase
b. Increase Increase
c. Decrease Decrease
d. No effect No effect
29.)
When the investment of a new partner exceeds the partner's initial capital balance, who will
receive the bonus?
a. The new partner
b. The old partners in their old profit and loss ratio
c. The old partners in their new profit and loss ratio
d. The old and new partners in their new profit and loss ratio
30.)
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
31.)
The ff statements pertain to admission of a new partner
I. The assets invested into the partnership and not given to the individual partners increase the total
assets of the partnership
II. When the newly admitted partner pays a bonus to the existing partners, the new partners' capital
account is debited to record the bonus to the old partners
III. When a new partner invests more than the proportionate share he receives in the partnership, a
bonus is recorded to his account
a. Only I is true
b. Only II is tru
c. Only III is true
d. Only I and II are true
32.)
Which of the ff statement is/are true?
I. When the existing partners pay a bonus to a newly admitted partner, the existing partners' account is
debited
II. When a new partner purchased the existing partner's P100,000 capital interest for P100,000, the
ensuing entry on the books of the partnership would contain a debit to Cash for P100,000
III. A partnership is dissolved when a new partner is admitted to the partnership
a. I and III
b. II and IIII
c. III only
d. I and II
Total partner's equity will not change when a withdrawing partner
a. Withdraws assets equal to his capital balance
b. Sells his interest to a new partner or remaining partner
c. Withdrwas assets amounting to less than his capital balance
d. Withdraws assets accounting to greater than his capital balance
33.)
It is the amount of capitl or equity transferred by one partner to another?
a. Capital credit
b. Total contributed capital
c. Bonus
d. Total agreed capital
34.)
When a partner retires, the books of the partnership should be adjusted as of
a. date of retirement
b. balance sheet date
c. interim report
d. none of these
35.)
When a partner retires and recieves in cash less than his capital balance, how should the
difference be treated?
a. The difference should be credited to all the partners in their profit and loss ratio
b. The difference should be debited to all the patners in their profit and loss ratio
c. The difference should be credited to the remianing partner in their remaing profit and loss ratio
d. The difference should be debited to the remaining partner in their remaining profit and loss ratio
36.)
When a partner withdraws from a partnership taking assets that represent less than his capital
balance
a. No bonus results
b. The remaing partners receive a bonus
c. The withdrawing partner receives a bonus
d. The remianing partners owe the withrawing partner the difference
37.)
When a partner dies, the capital account balances of the remaining partners
a. Will increase
b. Will decrease
c. Will remain the same
d. May increase, decrease, or remain the same
38.)
Jordan invested P400,000 for a one-fourth interest in the partnership in which the other partners
have capital totalling P800,000 before admitting him. Under the bonus method,
Jordan will have a capital balance of P266,667.
Jordan will give up bonus of P100,000.
Jordan will receive a bonus of P100,000.
Jordan will have a capital balance of P400,000.
39.)
If a bonus is given to the old partners upon the admission of a new partner, it shall be allocated
to the partners according to the:
profit and loss ratio of the old partnership.
profit and loss ratio of the new partnership.
capital ratio of the new partnership.
capital ratio of the old partners.
40.)
The following instances dissolve a partnership except:
admission of a new partner
conversion of a partnership into a corporation.
revaluation of partnership assets.
change of the name of the partnership
41.)
The following instances dissolve a partnership except:
admission of a new partner
conversion of a partnership into a corporation.
revaluation of partnership assets.
change of the name of the partnership
42.)
1.) D, E and F are partners whose capital balances totaled P400,000. They decided to admit G who
invested
P120,000 cash for a 20% interest. The partners agreed to revalue the assets. This will result to:
asset impairment of P20,000 for D, E and F.
asset revaluation of P80,000 to D, E and F.
an invalid agreement.
asset revaluation for G of P20,000
43.)
2.) Catalino invested P400,000 for a 20% interest in a partnership that has capital totaling
P1,500,000 after admitting Catalino. Which of the following is true?
The original partners' Capital in the business was P1,200,000 before admitting Catalino.
The original partners received a bonus of P100,000.
Catalino's Capital is P400,000.
Catalino received a bonus of P100,000.
44.)
LV bought Fendi's interest in the Medel and Fendi Partnership by a P600,000 direct payment
to Fendi. The capital balances before the sale were P240,000 and P360,000 to Medel and
Fendi, respectively. What will be the amount in LV's Capital account?
P300,000
P360,000
P600,000
P480,000
45.)
Po and Tol are partners who share profits and losses in a ratio of 2:1 and have capital balances
of P750,000 and P1,500,000, respectively. The partners agreed to admit TL to the partnership. TL
invested P750,000 for a 35% interest in the partnership. The new total capital balance after
admitting TL is P3,000,000. Tol's capital balance after TL is admitted is:
P1,350,000
P1,500,000
P1,600,000
P1,400,000
46.)
Yacapin, Mona and Sia share profits and losses in a 3:1:2 ratio, respectively. Mona wishes to
leave the partnership, so the assets are revalued and are found to be undervalued by P300,000. If
each partner had a capital balance of P500,000 prior to Mona's notification of withdrawal, what
amount should Mona be allowed to withdraw from the partnership?
P550,000
P450,000
P400,000
P500,000
47.)
On June 30, 2022, the account balances for the partnership of Cillon, Orly and Ram, together with
their respective profit and loss ratio, were as follows:

Assets at cost …………………………………………………….P 180,000

=========

Cillon, Loan ……………………………………………………….P 9,000

Cillon, Capital (20%) ………………………………………….. 42,000

Orly, Capital (20%) …………………………………………….. 39,000

Ram, Capital (60%) …………………………………………… 90,000

P 180,000

=========

Cillon decided to retire from the partnership. By mutual agreement, the assets are to be adjusted

to their fair value of P216,000 at June 30, 2022. It was agreed that the partnership would pay

Cillon P61,200 cash for Cillon’s partnership interest, including Cillon’s loan which is to be repaid
in

full. After Cillon’s retirement, what is the balance of Orly’s Capital account?
P 36,450
P 45,450
P 46,200
P 39,000
48.)
Mac and Cam are partners who share profits and losses in the ratio of 7:3 and had the following
capital balances: Mac P80,000; Cam P20,000. Brotus is to be admitted for a 25% interest in the
partnership by direct purchase from the partners for P22,000. How should the P22,000 cash be
divided between Mac and Cam?
Mac P17,900; Cam P4,100
Mac P18,550; Cam P3,450
Mac P11,000; Cam P11,000
Mac P17,600; Cam P4,400
49.)
Cara and Mel are partners with capital balances of P30,000 and P40,000 and sharing profits and
losses 4:6 respectively. If Choco is admitted as a partner paying P20,000 in exchange for 50% of
Cara’s equity, the entry in the partnership books should be as follows:
DR. Cash P15,000; CR. Choco, Capital P15,000
DR. Cash P20,000; CR. Cara, Capital P5,000; CR. Choco, Capital P15,000
DR. Cash P20,000; CR. Choco, Capital P20,000
DR. Cara, Capital P15,000; CR. Choco, Capital P15,000
50.)
Balde and Cabo are partners who share profits and losses in the ratio of 6:4. On October 1, 2021,
their capital account balances are: Balde P80,000 and Cabo P20,000. Yaboo is to be admitted for
a 20% interest in the partnership by direct purchase from the partners for P30,000. The new profit
and loss ratio for Baldo, Cabo and Yaboo, respectively will be:
3:2:5
40 : 40 : 20
6:4:2
12 : 8 : 5
51.)
Aldo and Fendi are partners who share profits and losses equally and have capital balances of
P560,000 and P490,000, respectively. Prada is admitted into the partnership by investing
P490,000 for 30% capital interest. Total Agreed Capital is based on existing partners' capital
balances. Asset impairment is recognized. The account balance of Fendi, Capital after the
admission of Prada would be:
P470,000
P500,000
P504,000
P465,000
52.)
Partners Kima, Capin, and Calang share profits and losses in a 5:3:2 ratio, respectively. Kima
wishes to leave the partnership, so the assets are revalued and are found to be overvalued by
P60,000. If each partner had a capital balance of P200,000 prior to Kima’s notification of
withdrawal, what amount should Kima be allowed to withdraw from the partnership?
P230,000
P 170,000
P140,000
P180,000
53.)
The statement of financial position of Ron Dalla and Paul Tahan showed among others the
following capital balances just before Mel Linial is

admitted into the partnership by buying 1/4 and 1/5 of Dalla's and Tahan's respective share:

Capital Fractional Share

Dalla P950,000 5/10

Tahan P890,000 5/10

The partners agreed to make adjustments on the valuation of the following non-current assets:

a. Allowance for doubtful accounts should be increased from P10,000 to P15,000.

b. Merchandise Inventory should be revalued from P100,000 to P85,000.

c. Equipment's net book value of P115,000 should be revalued at P130,000 based on the fair market
value.

At what amount Mel Linial has to pay the old partners if the purchase is at book value after the
adjustment?
P414,375
P400,380
P410,937
P415,875

54.)
The statement of financial position of Ron Dalla and Paul Tahan showed among others the
following capital balances just before Mel Linial is

admitted into the partnership by buying 1/4 and 1/5 of Dalla's and Tahan's respective share:

Capital Fractional Share

Dalla P950,000 5/10

Tahan P890,000 5/10

The partners agreed to make adjustments on the valuation of the following non-current assets:

a. Allowance for doubtful accounts should be increased from P10,000 to P15,000.

b. Merchandise Inventory should be revalued from P100,000 to P85,000.

c. Equipment's net book value of P115,000 should be revalued at P130,000 based on the fair market
value.

The present capital of the old and new partners after the admission is:
P1,835,000
P1,950,000
P1,980,000

55.)

56.)

57.)
58.)

59.)

60.)
61.)

62.)

63.)
64.)
65.)
66.)

67.)

68.)
69.)

70.)

71.) A
72.)

73.)

74.)