chapter 2 flashcards

Question 1

A business owned by two or more individuals is called a

Answer 1

partnership

Question 2

The only requirement for a partnership

Answer 2

Both partners should agree to operate a business

Question 3

Types of agreements that can make a partnership valid

Answer 3

Written and oral

Question 4

The first three parts in a balance sheet

Answer 4

Current assets, cash, trade and other receivable and prepaid expense

Question 5

Things under trade and other receivables

Answer 5

Accounts receivable and Accounts for doubtful accounts

Question 6

How many types of business organizations are out there

Answer 6

4

Question 7

a business which is owned and managed by only one person

Answer 7

Sole or single proprietorship

Question 8

An association of two or move persons who bind themselves together to do business for profit.

Answer 8

Partnership

Question 9

A body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties.

Answer 9

Corporation

Question 10

A people centered enterprise which are jointly owned and democratically controlled by and for their memebers to realize their common socio economic needs and aspirations.

Answer 10

Cooperative

Question 11

A business that engages in the rendering of services to other for a fee, like the beauty parlor, law firm, dental clinic, and medical clinic

Answer 11

Service concern

Question 12

Businesses that are into the buying and selling of goods or commodities like the grocery store, drug store and department store.

Answer 12

Merchandising or trading concern

Question 13

Businesses that are engaged in the processing of products or the conversion of raw materials into finished goods that are then sold like the furniture factory and shoe factory.

Answer 13

Manufacturing Concern

Question 14

A ______ is a contract in where two or more persons bind themsdelves to contribute money, property, or industry into a common fund with the intention of diving the profit among themselves.

Answer 14

Partnership

Question 15

A written agreement is required when partnership capital is _______ or more in money or in any property.

Answer 15

3000

Question 16

Partnership is formed through the mutual agreement of all the partners.

Answer 16

based on contract

Question 17

no one should be forced or coereced in joining a partnership

Answer 17

Voluntary association

Question 18

any partner may act as an agent of the partnership in conducting its affairs.

Answer 18

Mutual agency

Question 19

a partnership may be dissolved at any time by action of the partners or by operation of law.

Answer 19

Limited Life

Question 20

The personal assets of a general partner may be used to satisfy the claims of the creditors of the partnership, if the partnership assets are not enough to settle the liabilities to outsiders upon liquidation.

Answer 20

Unlimited liability

Question 21

Properties contributed to the partnership are owned by the partnership.

Answer 21

Co-ownership of property

Question 22

A partner has the right to share in partnerships profits.

Answer 22

Co ownership of profit

Question 23

A partnership has a legal personality seperate and distinct from that of each of the partners.

Answer 23

Legal Entity

Question 24

Partnerships are subjected to ______ of 20%

Answer 24

Income tax

Question 25

main activity is the rendering of services

Answer 25

Service

Question 26

main activity is the purchase or sales of goods

Answer 26

Merchandising or trading

Question 27

main activity is the production of good

Answer 27

Manufacturing

Question 28

one wherein all the partners are general partners who are liable for the partnership debts to the extent of their personal property after all the partnership assets have been exhausted

Answer 28

General

Question 29

one consisting of one or more general partners and one or more limited partners

Answer 29

Limited

Question 30

one in which the partners contribute all the property, which belong to each of them

Answer 30

Universal partnership of all present property

Question 31

one which comprises all that the partners may acquire by their industry or work during the existence of the partnership

Answer 31

Universal partnership of profits

Question 32

one which has for its object determinate things, their use or fruits or a specific undertaking or the exercise of a profession or vocation

Answer 32

Particular partnership

Question 33

one for which no term is specified and is not formed for a particular underetaking or venture

Answer 33

Partnership at will

Question 34

one in which the term or period for which the partnership is to exiswt is agreed upon

Answer 34

partnership with a fixed term

Question 35

one who contributes capital in money or property

Answer 35

Capitalist

Question 36

one who contributes industry, labor, skill or service

Answer 36

industrial

Question 37

one who contributes money, property and industry

Answer 37

Capitalist industrial

Question 38

one whose liabilitry to third persons extends to his private property

Answer 38

General

Question 39

one whose liability to third persons is limited only to the extent of his capital contribution to the partnership

Answer 39

Limited

Question 40

one who manages actively the business of the partnership

Answer 40

managing partner

Question 41

one that provides capital to the partnership but generally who does not participate in the management of partnership affairs.

Answer 41

silent

Question 42

a partner who is not really a partner, not being a party to the partnership agreement, but is made liable as a partner to safeguard and protect the rights of innocent third parties.

Answer 42

Nominal partner

Question 43

one who takes active part in the business but whose connection with the partnership is concealed on unknown to the public.

Answer 43

Secret

Question 44

one who does not take active part in the business and is not known to the public as a partner.

Answer 44

Dormant partner

Question 45

one who takes active part in the management of the firm and is known to the public as a partner in the business.

Answer 45

Otensible partner

Question 46

there will be as manay capital accounts and as many drawing accounts as there are partners.

Answer 46

More than one capital and drawings account

Question 47

partners may advance money to the partnership in the form of loans when the businesds needs additional funds.

Answer 47

Partners loans

Question 48

the partnership may advance money to partners other than withdrawals in the form of loans

Answer 48

Partner's borrowings

Question 49

partners are paid salaries

Answer 49

partners salaries

Question 50

Interest is allowed to earn on the asset invesment of the partners

Answer 50

interest on investment

Question 51

net profit or net loss is to be divided among the partners based on their agreements.

Answer 51

Division of profit and losses