PART I

1. Statements:

TRUE Agency may be oral.

FALSE Notice of the revocation in a newspaper of general circulation is a sufficient warning to

third persons.

2. Statements:

TRUE The principal may revoke the agency at will and compel the agent to return the document
evidencing the agency.

TRUE If two or more persons have appointed an agent for a common transaction or undertaking,
they shall be solidarity liable to the agent for all the consequences of the agency.

3. Statements:

TRUE The limits of the agent’s authority shall not be considered exceeded should it have been
performed in a manner more advantageous to the principal than that specified by him.

FALSE If the agent acts in his own name, the principal has no right of action against the persons
with whom the agent has contracted, neither have such persons against the principal.

4. Statements:

FALSE The principal is liable for the expenses incurred by the agent.

TRUE The agent may retain in pledge the things which are the object of the agency until the
principal effects the reimbursement and pays the agent for all the damages which the
execution of the agency may have caused the latter, without fault or negligence on his
part.

5. Statements:

FALSE The agent shall be liable for damages if there is a conflict between his interest and those
of the principal.

TRUE If the agent has been empowered to lend money at interest, he may himself be the
borrower at the current rate of interest.

6. Statements:

FALSE A person who is not a partner may not be liable as though he were a partner.

FALSE The receipt by a person of a share in the profits of a business is prima facie evidence that
he is a partner in the business.

7. Statements:

TRUE A partnership may be constituted in any form.

FALSE Persons who are prohibited from giving each other any donation or advantage cannot
enter into a particular partnership.

8. Statements:

TRUE A partnership begins from the moment of the execution of the contract.

TRUE Every partner is a debtor of the partnership for whatever he may have promised to
contribute thereto.
9. Statements:

TRUE A partner is co-owner with his partners of specific partnership property.

TRUE Every partnership shall operate under a firm name, which may or may not include the
name of one or more of the partners.

10. Statements:

TRUE The contributions of a limited partner may be cash or other property, but not services.

TRUE A person may be a general partner and a limited partner in the same partnership at the
same time.

PART II

1. Which of the following statements is correct?

a. A partnership contract is not covered by the Statute of Frauds.
b. A limited partnership is one having at least one general partner or one limited partner and
the limited partner shall not be liable for the obligations of the partnership.
c. A limited partner who takes active part in the management of the from becomes
liable as a general partner.
d. The contract of partnership is void if it contains a stipulation which excludes a partner from
sharing in the profits or the losses.

2. Partnership as distinguished from co-ownership:

a. It has juridical personality
b. Created not only by agreement of the parties but also by law
c. Purpose is to make profits
d. Profits are divided in proportion to one’s interest

3. The following, except one, are not the characteristics of a limited partnership. Which one is the
exception?
a. There is mutual agency among partners
b. The general partners are liable solidarily for the contractual obligations of the partnership
c. All the partners are liable after exhaustion of partnership assets to the extent of their
personal property
d. It has a juridical personality separate and distinct from the partners.

4. May contribute money, property or industry to the common fund:

a. General partner
b. Industrial partner
c. Limited partner
d. Capitalist partner

5. A limited partner who takes active part in the management of the firm becomes:
a. a managing partner
b. liable as a general partner
c. a general partner
d. a general partner and a limited partner at the same time

6. Which of the following statements is not correct?

a. A limited partner in a limited partnership manages the business of the partnership
but cannot perform acts of ownership without the consent of all the limited
partners.
b. Valid contributions of a limited partner are money and property but not services.
c. Additional limited partners maybe admitted into the limited partnership with the consent of
all the partners.
d. A person who is both a general partner and a limited partner is deemed a limited partner
only with respect to the return of his contribution.
7. A is the managing partner in A & B Company. X is indebted to A for P20,000.00 and to the
partnership for P60,000.00. When both debts mature, X pays A P20,000.00 and the latter issues a
receipt of the partnership. The payment for P20,000.00 shall be applied:
a. ¼ in favor of A and ¾ in favor of the partnership
b. To the whole debt owing to A
c. ½ in favor of A and ½ in favor of the partnership
d. To the debt owing to the partnership

8. Which of the following liabilities of a partner shall rank first in the order of payment?
a. Those owing to partnership creditors other than partners
b. Those owing to partners in respect to profits
c. Those owing to partners by way of contribution
d. Those owing to separate creditors

9. Which of the following incidents may be a cause for involuntary dissolution of a partnership?
a. Expulsion of any partner
b. Termination of the term of the partnership
c. Insolvency of any partner
d. Express will of any partner

10. XYZ Partnership composed of three (3) capitalist partners and one industrial partner
a.
b.
c.
d.