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ACTBFAR LE 2 > Partnerships (Formation) Part I > Flashcards

Partnerships (Formation) Part I Flashcards

1
Q

A decrease in the capital of one or more partners with a corresponding increase in the capital of another partner(s), without cash being involved, is a transfer of interest called:

A. Asset Revaluation
B. Appraisal
C. Goodwill
D. Bonus

A

D. Bonus

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2
Q

When transferring account balances into the new partnership books, ALL accounts including contra-accounts are transferred in full. True or False?

A

False

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3
Q

When forming a new partnership, where one of the partners is a sole-proprietor, the partners have a choice of using the existing books of the sole-proprietor or using a new set of books. True or False?

A

True

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4
Q

When a partner contributes capital that is equal to their share, it is called the full investment approach. True or False?

A

True

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5
Q

When existing books of one of the partners will be used for the new partnership, there is no need to close any of the accounts in the existing books. True or False?

A

False

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6
Q

Revaluation of assets will normally have an entry CREDITing the Partner, Capital account, and revaluation of liabilities will have an entry DEBITing the Partner, Capital account. True or False?

A

False

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7
Q

Accumulated Depreciation and allowance for doubtful accounts will always be found in the books of newly-created partnerships. True or False?

A

False

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8
Q

The partners’ drawing accounts are shown in the Statement of Financial Position. True or False?

A

False

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9
Q

Agreed value first, then fair market value is the order of priority basis for the valuation of assets and liabilities being contributed by the partners. True or False?

A

True

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10
Q

Capital contributions of the partners are shown in the Statement of Partners’ Equity. True or False?

A

True

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11
Q

Every contract having a capital of 3K pesos or more must be appear in a public instrument but not necessarily needed to be recorded in the Office of the Securities and Exchange Commission. True or False?

A

False. It must both appear in public and recorded in the OSEC with capital of 3K pesos.

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12
Q

A partnership contract is not necessarily needed to be notarized when there is an investment of real property and a capital worth Php 3,000. True or False?

A

False. It is necessary.

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13
Q

Profits and losses of a partnership shall be divided and distributed equally by the capital contribution of each partner. True or False?

A

False. It must be distributed proportionately.

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14
Q

What are the steps in forming a partnership?

A. DTI (business name); SEC (articles of partnership); SSS, PhilHealth, Pag-ibig (Employer ID number/certificate of membership); City of Municipal Office (Mayor’s permit and license to operate); BIR (TIN, BIR registration number, registration of accounting books, etc.)

B. DTI (business name); SEC (articles of partnership); City of Municipal Office (Mayor’s permit and license to operate); BIR (TIN, BIR registration number, registration of accounting books, etc.); SSS, PhilHealth, Pag-ibig (Employer ID number/certificate of membership)

C. City of Municipal Office (Mayor’s permit and license to operate); SSS, PhilHealth, Pag-ibig (Employer ID number/certificate of membership); DTI (business name); SEC (articles of partnership); BIR (TIN, BIR registration number, registration of accounting books, etc.); SEC (articles of partnership)

D. City of Municipal Office (Mayor’s permit and license to operate); SEC (articles of partnership); DTI (business name); SSS, PhilHealth, Pag-ibig (Employer ID number/certificate of membership)

A

B.

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15
Q

A new partnership is formed with at least one or more partners. True or False?

A

False. It should be two or more to form a new partnership

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16
Q

An industrial partner can incur company losses with profit and loss agreement. True or False?

A

True

17
Q

An industrial partner can incur company losses with profit agreement only. True or False?

A

False. Only when there is both profit and loss agreement.

18
Q

An industrial partner can incur company losses with no agreement. True or False?

A

False. Only when there is both profit and loss agreement.

19
Q

What type of agreement when a Capitalist partner shares profit/loss in proportion to capital contribution?

A

When there is no profit and loss agreement.

20
Q

What type of agreement when a Capitalist partner shares profit/loss as agreed?

A

When there is both a profit and loss agreement.

21
Q

What type of agreement when an industrial partner shares profit in just and equitable share?

A

When there is with profit agreement ONLY.

ACTBFAR LE 2 (9 decks)

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