Quiz 2 Partnership

I.When a partner leaves a partnership, it is possible that total assets will be unaffected.

II. When new partners invest more than the equity interest they are to receive in the net assets of an existing partnership, part of the entry to record the new partners' investments is an increase in the capital accounts of the old partners.

• True, True

• True, False

• False False

• False, True

I. When a new partner is given 30% interest in a partnership, he will receive 30% of all future profits and losses.

II. In admission by purchase, payment is personally made to the partner from whom the interest is obtained resulting to mere transfers among capital account

• True, True

• True, False

• False False

• False, True

I. The dissolution of a partnership is the same as the liquidation of a partnership.

II .Goodwill is the amount of capital or equity transferred by one partner to another partner.

• True, True

• True, False

• False False

• False, True

I.When Yolanda Garcesa purchased Esperanza Nolasco’s P200,000 capital interest for P200,000, the ensuing entry on the books of the partnership would contain a debit to cash for P200,000.

II.It is possible to invest assets into a partnership and be given a zero-capital balance.

• True, True

• True, False

• False False

• False, True

I.A partnership may be dissolved at any time by any of the partners.

II.The withdrawal of partner from a partnership is a type of dissolution.

• True, True

• True, False

• False False

• False, True

I.The creditors of the partnership shall have priority in payments over those of the partners' separate creditors as regards the partnership properties.

II.The loss absorption balances represent the maximum loss that the partners could absorb without reducing their equity below zero.

• True, True

• True, False

• False False

• False, True

I.Gains and losses on the sale of assets in liquidation are divided equally among partners.

II.A partnership may be dissolved without being liquidated but liquidation is always preceded by dissolution.

• True, True

• True, False

• False False

• False, True

I.A partner's inability to meet his obligations at the time of liquidation relieves that individual of his liabilities to the other partners.

II.A partner's unrestricted interest represents the portion of a partner's interest which should remain available to absorb possible future losses.

• True, True

• True, False

• False False

• False, True

I.In partnership liquidation, one partner may haye make up for the deficit in another partner's account.

II.When a partnership goes out of business, all the remaining non-cash assets will be declared as a total loss. This loss on liquidation shall be divided among the partners in their profit and loss ratio.

• True, True

• True, False

• False False

• False, True

I.Liquidation of a partnership is the winding up of its business activities characterized by sale of all non-cash assets, settlement of all liabilities and distribution of the remaining cash to the partners.

II.Partnership creditors shall have priority in payments than those of the partners' separate creditors as regards the separate properties of the partners.

• True, True

• True, False

• False False

• False, True