ACTPACO – ACCOUNTING FOR PARTNERSHIP AND CORPORATION

TERM 1 AY 2012-2013
QUIZ 1

Identify what term or phrase described by the following (1 POINT each):

Partnerships 1. A contract whereby two or more persons bind themselves together to contribute
money, property or industry to a common fund with the intention of dividing the
profits among themselves.
Unlimited Liability 2. The personal assets of the partners are held to satisfy partnership obligation when
the partnership itself has failed to pay its creditors.
Limited Life 3. The partnership operations can be dissolved because of the death, incapacity,
withdrawal, insolvency, etc. of any partner.
Business Partnerships 4. A partnership that is taxed in the same way as a Corporation.
Nominal Partner 5. A partner in name only.
Limited Partner 6. A partner who is liable for partnership obligations only up to his capital
contribution.
Industrial Partner 7. A partner who contributes only his services.
Mutual Agency 8. The act of one partner binds the other partners and the partnership.
Capitalist Partner 9. A partner who contributes money or property.
Universal Partnership 10. A partnership that has for its object the contribution of all their present
of All Present property to a common fund without retaining ownership of the property
Properties
contributed.
De Jure Partnership 11. A partnership organized and established in accordance with all legal requirements
for its existence.
General Professional 12. A partnership established for the exercise of a profession.
Partnership
De Facto Partnership 13. A partnership organized and established without complying with all legal
requirements for its existence.
Managing Partner 14. A partner whose identity known to the public and participates in managing the
business.
Silent Partner 15. A partner whose identity known to the public but does not participates in managing
the business.

Write TRUE if the statement is correct and FALSE if the statement incorrect (1 POINT each):
TRUE 1. A nominal partner is liable as a general partner.
FALSE 2. A limited partner can be liable to the extent of his personal properties to satisfy
partnership obligation when the partnership itself has failed to pay its creditors.
FALSE 3. The partnership has unlimited liability that is why its operations can be dissolved
because of the death, incapacity, withdrawal, insolvency, etc. of any partner.
TRUE 4. A General Professional Partnership is exempt from taxation.
TRUE 5. A partner whose identity known to the public and participates in managing the
business is a managing partner.
TRUE 6. A partnership can be created by mere agreement.
TRUE 7. An industrial partner is one who contributes services.
TRUE 8. A general partnership is composed of all general partners.
FALSE 9. A limited partnership is composed of all limited partners.
FALSE 10. In a limited partnership, a limited partner can be designated as a managing
partner.
FALSE 11. A partnership at will specifies a term in the partnership contract.
FALSE 12. At least five (5) persons are required to form a partnership.
TRUE 13. A nominal partner is one who allows his name to be used by the partnership.
TRUE 14. Admission of a new partner shall dissolve a partnership.
TRUE 15. Joe and Will formed a universal partnership of profit. Joe contributed a parcel of
land. Upon liquidation the land shall be returned to Joe.