ADAMSON UNIVERSITY

Financial Accounting and Reporting - Assignment

Prof. Judith Francisco – Luna

Name _____________________________________ Section _____________ Date ___________________

I. MATCHING TYPE
Write the CAPITAL LETTER of the term in Section A that best corresponds with each description in Section B.
Section A: Term
A. Capitalist Partner F. Mutual Agency
B. Partnership G. Unlimited Liability
C. Industrial Partner H. Limited Partner
D. De Jure Partnership I. Professional Partnership
E. Articles of Co-Partnership J. General Partnership
Section B: Description
_____ 1. A partnership wherein all the partners are general partners who are liable for all the partnership debts.
_____ 2. A partner who contributes money or property into the partnership.
_____ 3. The formal written partnership agreement registered with the Securities and Exchange
Commission.
_____ 4. A partner liable for partnership liabilities up to the extent of his capital contribution only.
_____ 5. A partnership formed for the exercise of a profession such as a law or accounting firm.
_____ 6. A partner who contributes his work, labor or industry to the partnership.
_____ 7. A partnership which has complied with all the legal requirements for its establishment.
_____ 8. Each partner, except for the limited partner, is individually liable for all the debts of the business.
_____ 9. Each partner is an agent of the partnership.
_____ 10. A contract between two or more persons who bind themselves to contribute money, property or
industry to a common fund with the intention of dividing the profits among themselves.
II. TRUE-FALSE
Write in CAPITALS the word TRUE if the statement is correct or the word FALSE if the statement is incorrect.
__________ 1. A partnership is much easier and less expensive to organize than a corporation.
__________ 2. All partnerships have a general partner.
__________ 3. Each partner generally has the authority to enter into contracts which are binding upon the
partnership.
__________ 4. The property invested in a partnership by the partners becomes the property of the partnership.
__________ 5. In a limited partnership, none of the partners has unlimited liability for the business debts.
__________ 6. A partnership should always be constituted in writing.
__________ 7. A partnership is a legal entity separate and apart from its owners.
__________ 8. The manner in which profits are to be shared should be specified in the articles of partnership.
__________ 9. A partnership agreement may validly stipulate that one partner shall receive no share in profits
or losses.
__________ 10. The Statement of Partners’ Capital in a partnership takes the place of the Capital Statement in
a sole proprietorship.
III. MULTIPLE CHOICE. Write the CAPITAL LETTER of the choice that best answers the question.
_____ 1. The articles of a partnership should make clear all of the following except:
A. profit-sharing ratio C. causes of partnership dissolution
B. withdrawals allowed to partners D. taxes paid by the partnership
_____ 2. A business would be organized as a limited liability partnership to
A. reduce regulation of the business C. raise additional capital
B. eliminate double taxation D. limit the liability of the owners to their investment.
_____ 3. The partnership agreement is contained in the articles of partnership, an express contract among the
partners. Such an agreement ordinarily does not include
A. a limitation on a partner’s liability to creditors
B. the rights and duties of the partners
C. the allocation of income between the partners
D. the rights and duties of the partners in the event of partnership dissolution.
_____ 4. A partnership
A. is created by agreement of the partners.
B. has a juridical personality separate and distinct from that of each of the partners.
C. may be constituted in any form, except where immovable property or real rights are contributed, in
which case the law requires that a public instrument be executed.
D. is dissolved by death of a partner.
E. all of the above.
_____ 5. When a partner invests assets other than cash into a partnership, these assets should be listed on the
statement of financial position at
A. their carrying (book) value. C. their fair market value.
B. their original cost. D. the value the investing partner assigns to them.
_____ 6. A Statement of Changes in Partners’ Equity should include all of the following except
A. Beginning capital balances. D. Withdrawals during the period.
B. Investments during the period. E. Ending capital balances.
C. Partner’s payments of loans. F. Share of profit for the period.
_____ 7. When a partnership cannot pay its debts with business assets, the partners
A. must use their personal assets to meet the debts C. have limited personal liability
B. are not personally liable for the debts D. must convert the partnership to a joint venture.
_____ 8. Two sole proprietors formed a partnership. Non-cash assets forming part of the initial investment in
the partnership would be recorded at the
A. Proprietors’ book values or the fair value of the property at the date of the investment, whichever is
higher.
B. Proprietors’ book values or the fair value of the property at the date of the investment, whichever is lower.
C. Fair value of the property at the date of the investment.
D. Proprietors’ book values of the property at the date of the investment.
_____ 9. Which of the following items is not collectible from a partner?
A. Loan receivable from partner C. Loans from partner
B. Loans to partner D. Due from partner.
_____ 10. A partnership ends its life when
A. it changes its name. C. a new partner is admitted.
B. unlimited liability exists. D. the partnership incurred losses.