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Integrated Accounting for Business 2 Flashcards

(63 cards)

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1
Q

Accounts Receivable and Allowance for Bad Debts (AFBD) are ________

A

Contra-assets

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2
Q

5 Classifications of Partnership: According to Legality of Existence
a. SEC (Security and Exchange Commission) compliant of all legal requirements
b. doesn’t comply to legal requirements to SEC

A

a. De Jure
b. De Facto

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3
Q

profits/gain will continue to operate

A

Going Concern

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4
Q

3 Elements of Contract:

A
  1. Consent
  2. Object
  3. Cause
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5
Q

is estimated selling price less estimated costs of completion and costs to sell.

A

Net Realizable Value (NVR)

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6
Q

What does it mean by capital contributions?

A

Money / Property

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7
Q

10 Characteristics: It requires less formality

A

Ease of Formation

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8
Q

10 Characteristics: partnership can transact and acquire properties in its name. (Judicial Personality and Legal Personality)

A

Separate Legal Personality

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9
Q

True or False: Each partner’s capital account is debited for the fair value of his net contributions.

A

False. Must be credited.

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10
Q

True or Flase: Unlimited life and limited liability are advantages of a partnership over corporations.

A

False

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11
Q

True or False: A partner has no right to possess a partnership property for any other purpose without the consent of his partners.

A

True

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12
Q

What does it mean by industry?

A

Labor/skills

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13
Q

2 Methods of Average Capital

A
  1. Months unchanged method
  2. Months outstanding method
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14
Q

capital contributions from the date of partnership formation

A

Original Capital

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15
Q

_______ is recorded on the credit side of an account. Any increase is also recorded on the credit side. Any decrease is recorded on the debit side. (minus)

A

Capital

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16
Q

Kind of partner participating actively and is not known by public

A

Secret

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17
Q

Capital Contribution in the beginning of the year or the reporting period

A

Beginning Capital

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18
Q

Does industrial partners share in losses?

A

No

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19
Q

Accounting for initial investments to the partnership

A

Formation

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20
Q

Contracts may be _______ or _______.

A

Written or Verbal

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21
Q

Division of profits and losses

A

Operation

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22
Q

How many persons can be in a partnership?

A

No limitations. Just two or more

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23
Q

5 Classifications of Partnership: According to Duration
a.
b.

A

a. Fixed Term
b. At will

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24
Q

an artificial being created by operation of law having the right of succession with the powers, attributes, and properties granted by the law or inherent to its existence.

A

Corporation

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25
3 Steps:
1. To adjust the sole proprietor’s books. (fair value) 2. To close the sole proprietor’s books. ▪ Debit all accounts with credit balances. ▪ Credit all accounts with debit balances. 3. Record contributions in partnership policies.
26
10 Characteristics: "the act of one is the act of all" Fiduciary Relationship - established based on confidence and trust
Mutual Agency
27
Kind of partner participating actively and known by public.
Ostensible Partner
28
The assets contributed to the partnership are measured in the partnership books at carrying amount or cost to the contributing partner.
False
29
10 Characteristics: Agreed assets to be contributed
Co-Ownership of Contributed Assets
30
True or False: A stipulation which excludes one or more partners from any share in the profits or losses is valid.
False
31
4 Stages of Partnership
1. Formation 2. Operation 3. Dissolution 4. Liquidation
32
10 Characteristics: partnership may be dissolved by the will of any partner, termination, expulsion, death, insolvency, or withdrawal.
Limited Life
33
______ is a partner who takes no share in the active business of a company or partnership, but is entitled to share in profits and subject to share in losses.
Dormant
34
5 Classifications of Partnership: According to Purpose a. to buy and sell, merchandising b. services, firms
a. Trade b. Non-Trade
35
5 Classifications of Partnership
1. According to object 2. Liaility 3. Duration 4. Purpose 5. Legality of Existence
36
______ is a characterisitc of partnership wherein no partner shall be excluded from the share in partnership profits.
Division of Profits
37
11 Kinds of Partners:
1. General 2. Limited 3. Managing 4. Liquidity 5. Capitalist 6. Industrial 7. Ostensible 8. Dormant 9. Silent 10. Secret 11. Partner by Estoppel
38
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market particiapants at the measurement dat.
Fair Value
39
5 Classifications of Partnership: According to object a. Universal Partnership of all _____ properties b. Universal Partnership of ______ c. ______ Partnership
a. Universal partnership of all present properties b. Universal Partnership of profit c. Particular Partnership
40
5 Classifications of Partnership: According to Liability: a. b.
a. General Partnership b. Limited Partnership
41
______ partner cannot be a managing partner because he has limitations on being held liable.
Limited Partner
42
2 Types of Property
Immovable / Real Property Personal Property
43
10 Characteristics: of the assets of the partnership is not enough, personal assets may be used.
Unlimited Liability
44
Kind of Partner not a partner but representing the company/partnership. It is up to the partnership if they will honor or not the representation
Partner by Estoppel
45
Kind of Partner participating inactively and is not known by public.
Dormant
46
True or False: If only the allocation of profits has been agreed upon, the allocation of losses shall be in the same proportion.
True
47
Winding-up of affairs
Liquidation
48
Kind of Partner – participating inactively and is known by public.
Silent
49
Considered as a person by the law
Judicial Personality
50
Admission of a new partner and withdrawal, retirement, or death of a partner
Dissolution
51
Capital Contribution in the end of the year or reporting period (fiscal year)
Ending Capital
52
a contractual agreement whereby two or more perosns bind themselves to contribute money, property, or industry into a common fund with the intention to provide profits among themselves.
Partnership
53
A partnership in which all partners are individually liable
General Partnership
54
Order of Priority in Profit (3)
1. Based on partners' agreement. 2. Based on capital contributions (capital partners) 3. Just and Equittable - industrial partners
55
Kind of Partner that contributes industry such as labor and/or skills.
Industrial Partner
56
3 Partnership Formation
1. Two (2) individuals with no existing business. 2. One (1) individual and one (1) sole proprietor. 3. Two (2) sole proprietors.
57
Order of Priority in Losses (4)
1. Based on partners' agreement 2. No loss agreement but with profit sharing agreement. 3. Capitalist partners - based on capital distributions 4. Industrial Partners - no share in loss
58
10 Characteristics: 1. Ease of _______ 2. _______ Contribution 3. _______ Legal Personality 4. Co-______ of _________ Assets 5. Division of ________ 6. _______ Life 7. _______ Liability 8. _______ Agency 9. _______ ______ Account 10. Transfer of _________
1. Ease of Formation 2. Mutual Contribution 3. Separate Legal Personality 4. Co-Ownership of Contributed Assets 5. Division of Profits 6. Limited Life 7. Unlimited Liability 8. Mutual Agency 9. Partners' Capital account 10. Transfer of Ownership
59
Kind of Partners that contributes money or property
Capitalist Partner
60
10 Characteristics: requires the approval of the remaining partners.
Transfer of Ownership
61
4 Types of Capital Contributions:
1. Original Capital 2. Beginning Capital 3. Ending Capital 4. Average Capital
62
A partnership in which at least one partner is personally liable
Limited Partnership
63
True or False: In partnership formation, all accounts in the sole proprietor's books will be transferred to the partnership books.
False

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