FEU DILIMAN

ACCOUNTING 3B

Name: ____________________________________________ Date: __________________

Quiz 1

PART 1:

1. A capitalist partner is one who contributes

a. his services
b. only cash
c. money or property
d. money, property or services.

2. An industrial partner contributes his

a. labor and skill only
b. personal assets
c. money and intellectual property
d. all of the above

3. Which of the following is not an essential element of a partnership?

a. The contract must be in writing.
b. An agreement to contribute money, property, or industry.
c. An intention to divide profits.
d. Established for lawful purposes.
e. None of the above.

4. Which of the following has unlimited liability?

a. General partner c. Both
b. Limited partner d. Neither

5. The following are the inherent rights of a partner except the right to
a. share in the profits
b. participate in management
c. share in the partnership asset
d. demand salaries

6. Which of the following statement is false?

a. A partner who allows his name to be included in the partnership name is deemed to be a
general partner.
b. A silent partner is a general partner.
c. A nominal partner contributes only a nominal amount.
d. An industrial partner can be a capitalist partner at the same time.
e. None of these

7. How many of the following statements is/are false?

1. A partnership is easier to organize than a corporation.
2. A corporation is easier to dissolve than a partnership.
3. A partnership is less expensive to organize than a corporation.
4. A corporation has more legal requirements than a partnership.
5. A limited partner can not invest his skill, knowledge and industry in a partnership.

a. One b. Two c. Three d. Four e. None of these

8. Which of the following is not a characteristic of most partnerships?

 a. Limited liability
b. Mutual agency
c. Limited life
d. Ease of formation

9. One who takes charge of the winding up of partnership affairs upon dissolution is a
a. Silent partner
b. Liquidating partner
c. Ostensible partner
d. Dormant partner

10. A partner whose liability for partnership debts is limited to his capital contribution is called a
a. general partner
b. limited partner.
c. industrial partner.
d. secret partner.

PART 2:

Identify the following statements by writing the word of group of words on the answer sheet portion.

ANSWER SHEET
1. _____________________________ 6. ______________________________
2. _____________________________ 7. ______________________________
3. _____________________________ 8. ______________________________
4. _____________________________ 9. ______________________________
5. _____________________________ 10. ______________________________

1. A partner who contributes labor, knowledge and skill.

2. Any partner can represent the partnership in any business transaction as long as these acts are
within the scope of the normal partnership activity.

3. A partner who has financial interest in the partnership does not take an active part in the
management of the firm and not known to be a partner.

4. A partnership formed for the exercise of their common profession.

5. A partnership which has complied with all of the legal requirements for its establishment.

6. The partner who has financial interest in the partnership, not known to be a partner, but takes an
active part in the management of the firm.

7. A partner who is liable only to the extent of his capital contribution.

8. A partnership wherein all the partners have limited liability except for at least one general partner.

9. A partner who has no financial interest in the firm, represents himself as a partner or allows
his name to appear as a partner and therefore assumes the unlimited liability of a general partner.

10. This kind of partnership is one where all contributions become part of the partnership fund and all
partners become co-owners of all partnership properties.
Part 3:

Encircle letter T if the statement is true and letter F if the statement is not true.

T F 1.A partner has the right to bind the partnership to contracts.

T F 2.A partnership should always be constituted in writing.
T F 3.A partnership must always have more than two owners.
T F 4.
A silent partner takes an active part in the business of the partnership and is not known by outsiders
to be a partner.
T F 5. In a general partnership, not all partners are personally liable for all debts incurred by the
partnership.
T F 6. There can be a partnership without contribution of money, property or industry to a common
fund.
T F 7. A partnership includes limited life, mutual agency, and unlimited liability for general partners.
T F 8. A partnership may be established for religious purposes.
T F 9. A secret partner takes an active part in the business of the partnership and is not known by outsiders
to be a partner.
T F 10. One disadvantage of a partnership over the corporation is the unlimited liability of partners.

Part 4:

1. On June 1, 2014, Saba and Lacatan agreed to form a partnership to sell fruits and vegetables. On
June 15, Saba invested cash, P280,000 and office equipment with a current fair value of P20,000.

On the other hand, Lacatan contributed a service vehicle with a fair value of P150,000.
In addition, Lacatan is to invest sufficient cash to equal Saba's investment.

Tasks: 1. Prepare the journal entries to record Saba's investments.

2. Compute the additional cash that Lacatan has to invest to equal Saba's investment.
3. Prepare the journal entries to record Lacatan's investments

2. Sano and Pango agreed to form a partnership on September. 21, 2014, for the purpose of
manufacturing and selling custom stainless plates. Both are master crafters and have their
own tools and equipment which they will invest in the business.

Sano and Pango determined that their tools and equipment have fair value of P160,000
and P190,000, respectively. They further resolved to invest sufficient cash such that
each partner will have a beginning capital balance of P250,000.

Solve: 1. How much cash should Sano invest so that his beginning capital balance will be
P250,000?
Prepare the journal entries to record Sano's investment.
2. How much cash should Pango invest so that his beginning capital balance will be
P250,000?
Prepare the journal entries to record Pango's investment.

3. Marah Mot owned a small garage that can be converted into a car repair shop. Matt Shifag is an
experienced mechanic. They agreed to form a partnership. Marah shall invest all the necessary
working capital, tools, equipments and place for the repair shop while Matt will contribute his skill
and knowledge in running the business. They will divide the profit and loss at 50:50 ratio.

On March 1, 2014, Marah Mot invested cash - P 1,000, tools and equipment worth P 9,000 and the
garage with a fair market value of P200,000.

Tasks : 1. Record the capital of Marah Mot in the partnership book.

2. Record the capital of Matt Shifag in the partnership book.