Accounting 2 (Partnership and Corporation)
I.
Choose the best answer : ENCIRCLE the LETTER ONLY
1.
It is a contract among and 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.
a.
Corporation c.
Partnership
b.
Sole proprietorship
d.
All of the above
2.
Which is not among the characteristics of a
partnership?
a.
Separate
legal personality c.
limited liability
b.
Limited
life d.
voluntary association
3.
He
is a partner who is not really a partner but allows his name to be used by the
partnership for accommodation or for other consideration.
a.
Nominal
partner c. dormant
partner
b.
Secret
partner d.
silent partner
4.
A
partner who actively manages the affairs
of the business and is known to be a partner
a.
Industries
partner c. general
partner
b.
Managing
partner d. dormant
partner
5.
He
is a partner that does not participate actively in the management of the
business and is not known to be a partner.
a.
Dormant
partner c.
industrial partner
b.
Managing
partner d. general
partner
6.
He
is a partner who actively manages the affairs of the business but is not known
to be a partner.
a.
Managing
partner c. secret
partner
b.
Silent
partner d.
dormant partner
7.
The
Articles of Co-Partnership should contain clear provisions on all of the
following except
a.
Taxes
paid by the partnership c.
withdrawals allowed to partners
b.
Causes
of partnership dissolution d. profit
–sharing ratio
8.
The
non-cash contributions of the partners to form a partnership are recorded by partnership at their
a.
Book
value c. dissolution value
b.
Agreed
value d.
original value
9.
When
a partnership cannot pay its debts with business assets, the partners
a.
Are
not personally liable for the debts
c. must convert the partnership to a joint venture
b.
Have
limited personal liability
d. must use their personal assets to meet debts
10.
A
partnership that has failed to comply with one or more of the legal
requirements for its establishments is classified as a (an)
a.
Open
partnership c. de facto partnership
b.
De
jure partnership d.
secret partnership
11.
If
the partners have not drawn up an agreement, then they must share profits and
loses
a.
Equally
c. by an appropriate ratio
b.
By
any means that will save taxes d. according to capital contributions
12.
Among
the various options available by determining the partners` share of profits are
the following except
a.
Loans
to the partnership
c. capital contributions
b.
Stated
fraction or ratio
d. capital contributions and service to the partnership
13.
A
person maybe come a partner in a partnership by all of the following methods
except
a.
Investing
in the partnership with a bonus to the new partner
b.
Making
a loan to the partnership
c.
Investing in the partnership with a bonus to
the old partner
d.
Purchasing
a partner`s interest
14.
Which
of the following does not result in the dissolution of the partnership ?
a.
Marriage
of a partner c. addition of a new partner
b.
Withdrawal
of a partner d. death of a partner
15.
A
new partner maybe admitted into a partnership of the following except
a.
Investing
in the partnership c. purchasing a partner`s interest
b.
Both a and c d. purchasing preferred stock of
the partnership
16.
A
partner may withdraw his interest at all of the following, except
a.
Less
than book value c. more the book value
b.
Future
expected value d. book value
17.
If
a partner withdraws in the middle of the accounting period, updating the
partnership books is
a.
Automatic c. unnecessary
b.
Optional d. required
18.
A
partner who withdraws his interest at book value receives
a.
Assets=to
his capital interest c. assets less than his capital
interest
b.
Assets
with indeterminate value d. assets above his capital interest
19.
The
withdrawal of a partner of his interest at more than book value results in
a.
A
bonus from remaining partners c. a loss to remaining partners
b.
A
gain to remaining partners
d. a gain or loss depending on the tax basis
20.
The
liquidation of a partnership includes all of the following steps, except
a.
Obtaining
court approval
b.
Selling
the partnership`s non-cash assets
c.
Paying
the partnership liabilities
d.
Distributing
the remaining cash to partners
21.
A
capital efficiency in a partner`s capital that is uncollectible is
a.
The
result of a sale non-cash assets at profit
b.
The
result of a loss in operations
c.
A
loss to the other partners
d.
A
gain to the other partners
22.
The
other partners must absorb the
deficiency in a partner`s capital account in liquidation because of
a.
Unlimited
life and mutual agency
b.
Mutual
agency and unlimited liability
c.
Limited
life and co-ownership of property
d.
Mutual
agency and partnership`s taxability
23.
When
a partnership is liquidated, all of the following may occur, except
a.
A
partner erases his deficiency by declaring bankruptcy
b.
The
other partners absorb a partner`s deficiency
c.
A
partner erases his deficiency by contributing property
d.
A
partner erases his deficiency by contributing cash
24.
In
the final liquidation transaction, the remaining cash is distributed to the
partners. The partners share in the cash according to their
a.
Profit
and loss ratio
c .capital balances
b.
Withdrawals d.
cash balance
25.
The
order of a partnership liquidation process is
a.
Sell
assets, disburses cash to partners, pay liabilities
b.
Disburse
cash to partners, pay liabilities, sell assets
c.
Pay
liabilities, sell assets, disburse cash to partners
d.
Sell
assets , pay liabilities, disburse cash to partners
26.
In
a partnership liquidation, a loss from sale of non-cash is
a.
Allocated
to other partner with the lowest capital balance
b.
Allocated
to the partnership liabilities
c.
Allocated
to the partners based on their capital balances
d.
Allocated
to the partners based on the profit and loss sharing ratio
27.
Which
of the following partners has or have unlimited liability?
a.
General
partner
b.
Limited
partner
c.
Both
d.
Neither
28.
As
far as creditors are concerned, which of the following partners is/are liable
for unpaid debts of the partnership?
a.
Industrial
partner c. silent partner
b.
Nominal
partner d. all of the above
29.
Which
of the following partners does not or do not take active part in the management
of the partnership business?
a.
Silent
partner c.
nominal partner
b.
Dormant
partner d. all of the above
30.
The
following are inherent rights of a partner, EXCEPT
a.
Right
to share in the profits
b.
Right
to participate in the management of the partnership
c.
Right
to share in the partnership assets in the event of dissolution
d.
Right
to demand salaries
31.
Which
of the following statement is FALSE?
a.
A
partner who allows his name to be included in the partnership name is deemed to
be a general partner
b.
A
silent partner is a general partner
c.
A
nominal partner contributes only a nominal account
d.
An
industrial partner can also be capitalist partner at the same time
32.
Which
of the following would not be considered a characteristic of a corporation?
a.
Separate
legal entity c.
mutual agency
b.
Limited
liability of share holders d.
both a and c
33.
Which
of the following statement describing a corporation is not true?
a.
Shareholders
are the owners of a stock corporation.
b.
When
ownership of corporation changes, the corporation does not terminate.
c.
Shareholders
own the business and manage its day to day affairs.
d.
A
corporation is subject to a greater governmental regulation then a single
proprietorship or partnership
34.
The
par value of a share capital
a.
Is
usually different from its market value
b.
Is
often higher for preference share than for
ordinary share
c.
Is
an arbitrary amount a signed to a share of stock
d.
All
of these
35.
Which
of the following is not one of the basic rights of a shareholder?
a.
The
right to participate in earnings
b.
The
right to maintain one`s to proportionate interest in the corporation.
c.
The
right to Inspect the accounting records of the corporation.
d.
The
right to participate in the proceeds from the sale of corporate assets upon
liquidation of the company.
36.
The
ownership of a share capital entitles ordinary share holders to all of the
following right except
a.
Voting
right
b.
Preemptive
right
c.
Right
to receive a proportionate share of assets in corporate liquidation
d.
Right
to receive guaranteed dividends
37.
Which
of the following statements about preference share capital is not true?
a.
Preference
share capital share carries derived to vote
b.
Preference
share capital dividends are usually paid
prior to payments of ordinary share capital dividends.
c.
Preference
share capital usually shares the right to receive assets pro-rata with the
ordinary shareholders in case of corporate liquidation
d.
In
addition to being paid dividends prior to those paid to ordinary shareholders,
preference shareholders of the right to receive assets pro-rata with ordinary
share holders in the event corporate liquidation.
38.
The
maximum number of shares of stock that the government gives a corporation
permission to issue is the
a.
Granted
shares
c. issued shares
b.
Authorized
shares d. outstanding shares
39.
A
preference share capital that may exchanged for ordinary share capital is known
as
a.
Cumulative c. man-cumulative
b.
Participating d. convertible
40.
The
cost of organizing a corporation should be
a.
Expensed
in the year of organization
b.
Reported
as an intangible assets
c.
Reported
as a tangible asset
d.
Deducted
from share capital
41.
A
non cash asset received in exchange for share capital is recorded at
a.
Its
book value c. the lower of its book value or fair
market value
b.
Its
fair market value d. the higher of its book value of fair
market value
42.
The
entry to record the issuance of ordinary share capital for fully paid stock
subscription is
a.
Memorandum
entry
b.
Debit
ordinary share capital subscribed and credit ordinary share capital
c.
Debit
ordinary share capital subscribed and credit additional paid in capital
d.
Debit
or ordinary share capital subscribed and credit subscription receivable
43.
The
issuance of shares of ordinary share capital to shareholders
a.
Increases
ordinary share capital authorized
b.
Decreases
ordinary share capital authorized
c.
Increase
ordinary share capital outstanding
d.
Decrease
ordinary share capital outstanding
44.
On
June 1, authorized ordinary share capital was solved on a subscription basis at
a price in excess of par value, and 40%
of the subscription price was collected. On October 1, the remaining 60%
of the subscription price was collected. Ordinary share premium will be
credited on
June
1 October
1
a.
No
Yes
b.
No
Yes
c.
Yes
No
d.
Yes Yes
45.
Owners
of a corporation whose names are mentioned in the articles of incorporations are called
a.
Shareholders c. promoters
b.
Members d. incorporators
46.
The
documents that is required to be submitted by a corporations to the Securities
and Exchange Commissions for approval that enumerates its powers and authority
is called
a.
Corporate
by-laws c. articles of incorporation
b.
Treasurers
affidavit d. stock certificates
47.
Which
of the following is an example of a quasi-public corporation?
a.
City
of Manila c.
Shoe mart
b.
PLDT d.
Department of Agriculture
48.
A
corporation which is controlled by another corporation is called
a.
Parent
corporation
c. holding corporation
b.
Subsidiary
corporation d. Group companies
49.
A
corporation is required to maintain the following books and records, except the
a.
Minutes
book c. books of accounts
b.
Stock
and transfer book d.
Log book
50.
Which
of the following classes of a preference shares entitles the holders to receive
dividends in arrears?
a.
Non-cumulative
preference shares
b.
Cumulative
preference shares
c.
Non-participating
preference shares
d.
Participating
preference shares
