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- 1. Multiple Choice
A partnership dissolution does not automatically lead to liquidation.
True
False
- 2. Multiple Choice
In an admission by purchase of interest, the journal entry to record a cash contribution of the new partner is a debit to cash.
True
False
- 3. Multiple Choice
In an admission by contribution of asset, the partnership equity will increase.
True
False
- 4. Multiple Choice
When the actual contributed capital is not equal with the capital credit, the difference representing a bonus will be distributed to the partners based on their original capital contribution ratio.
True
False
- 5. Multiple Choice
When the amount paid by a new partner is different from the amount credited to his/her capital account,
the difference is a bonus given to the new partner
the difference is a bonus given to the old partners
the difference will be debited or credited to the old partners
the amount needs to be determined first for proper treatment
- 6. Multiple Choice
Which of the following journal entries represent a transfer of interest?
Dr. A, Capital
Cr. B, Capital
Dr. Cash
Cr. B, Capital
Dr. Cash
Cr. A, Capital
Cr. B, Capital
Dr. B, Capital
Cr. Cash
Cr. Accounts Receivable
- 7. Multiple Choice
Which of the following will not dissolve a partnership?
When a partner has a debit balance in his capital account
When a new partner is admitted
When a partner becomes insane
When a partner retires from the partnership
- 8. Multiple Choice
When a bonus belongs to the new partner, the old partners' capital accounts
stay the same
will be debited
will be credited
answer cannot be determined
- 9. Multiple Choice
If a partner retires, can the partnership give him/her assets other than cash?
No, the capital should always be returned in the form of cash.
No, the partnership should return what he/she originally invested.
Yes, provided that the amount received is always equal to the book value of the retiring partner's capital.
Yes, it is not always cash that can be distributed to the retiring partners.
- 10. Multiple Choice
A, B and C are partners in ABC Partnership with capital balances of P100,000, P100,000 and P50,000 respectively and sharing profits or losses in 2:2:1. With the consent of all the partners, D is admitted by contributing P50,000 in exchange for a 15% interest in the partnership equity. How much will be the capital credit of D upon admission?
45,000
50,000
37,500
44,117
- 11. Multiple Choice
A and B are partners in AB Co. with a capital contribution of P50,000 and P30,000, respectively. They share profits or losses 3:2. If C is to be admitted by purchasing 20% interest of the partners' capital balances by paying P20,000, how much is the new partnership equity?
100,000
80,000
96,000
90,000
- 12. Multiple Choice
The balance sheet is prepared prior to incorporation of the partnership:
Cash - 23,000; Accounts receivable - 12,000; Inventory - 10,000; Other assets - 45,000; Accounts payable - 7,000; Notes payable - 13,000
Prior to incorporation, the following has to be considered: (1) an allowance of 2,000 will be set up; and, (2) an accrued expense of 3,500 is to be recorded.
Determine the share capital upon incorporation.
64,500
70,000
68,500
75,500
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