Business Partnership Quiz #2

37 Questions | Total Attempts: 3749

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Business Partnership Quiz #2

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Questions and Answers
  • 1. 
     Which of the following results in dissolution of a partnership?
    • A. 

      The withdrawal of a partner from a partnership

    • B. 

      The receipt of share in profit by an existing partner

    • C. 

      The contribution of additional assets to the partnership by an existing partner.

    • D. 

      The winding up of the partnership and distribution of remaining assets to partners.

  • 2. 
    If a partner cannot clear his debts on dissolution, the other partners must clear these debts in the following manner:  
    • A. 

      In the ratio of their last agreed capital balance

    • B. 

      Partnership profit/loss sharing ratio

    • C. 

      Debts are shared equally

    • D. 

      Debts should not be cleared by other partners

  • 3. 
    One advantage of operating as a partnership would include:  
    • A. 

      Access to a larger amount of initial capital.

    • B. 

      Limited liability for all partners.

    • C. 

      Being able to raise capital through share issues.

    • D. 

      Greater power than a sole trader for decision making.

  • 4. 
    In the absence of an agreement profit and loss are divided by partners in the ratio of:
    • A. 

      Capital

    • B. 

      Equally

    • C. 

      Time devoted by each partner

    • D. 

      None of these

  • 5. 
    At the time of admission of a new partner the firm is:
    • A. 

      Dissolved

    • B. 

      Continued

    • C. 

      Not affected

    • D. 

      Re-organized

  • 6. 
    The partnership may come to an end due to the:
    • A. 

      Death of a partner

    • B. 

      Insolvency of partner

    • C. 

      Insanity of a partner

    • D. 

      All of the above

  • 7. 
    Loss on realization is distributed among partners:
    • A. 

      According to profit and loss ratio

    • B. 

      According to capital contribution

    • C. 

      As decided among them

    • D. 

      None of the above

  • 8. 
    A partnership is liquidating and one of the partner's capital accounts has a deficit balance. What should happen?
    • A. 

      The deficit balance should be removed from the accounting records and the remaining partners would share in any additional profits.

    • B. 

      The partner with the deficit should contribute enough personal assets to eliminate the deficit balance.

    • C. 

      The partner with the highest capital balance should allocate enough dollars to eliminate the deficit balance.

    • D. 

      The other partners should contribute personal assets to eliminate the deficit balance.

  • 9. 
    The advantage of a corporation from a partnership is
    • A. 

      The death of a shareholder will not dissolve the corporation because of the power of succession

    • B. 

      Its management is centralized on the board of directors.

    • C. 

      Shareholders have limited liability

    • D. 

      Shareholders are not general agents of the business

    • E. 

      All of the above

  • 10. 
    Corporators in a stock corporation
    • A. 

      Incorporators

    • B. 

      Promoters

    • C. 

      Members

    • D. 

      Shareholders

  • 11. 
    Refers to an equitable right of shareholders to subscribe to newly issued shared of the corporation in proportion to their present shares in order to maintain the equity in their surplus as well as proportionate standing in the corporation.
    • A. 

      Right to redemption

    • B. 

      Pre-emptive right

    • C. 

      Right to be sued

    • D. 

      Concept of corporate entity

  • 12. 
    Persons who compose the corporation whether as shareholders or members are called
    • A. 

      Corporators

    • B. 

      Incorporators

    • C. 

      Promoters

    • D. 

      Subscribers

    • E. 

      None of the above

  • 13. 
    One of the following is not a characteristic of the corporate form of organization
    • A. 

      Limited liability of shareholders

    • B. 

      Mutual agency

    • C. 

      Continuous existence

    • D. 

      Centralized authority

  • 14. 
    The following is the priority sequence in which liquidation proceeds will be distributed for a partnership:
    • A. 

      Partnership liabilities, partnership capital balances and partnership loans

    • B. 

      Partnership liabilities, partnership loans and partnership capital balances.

    • C. 

      Partnership drawings, partnership liabilities, partnership loans and partnership capital balances

    • D. 

      Partnership liabilities, partnership loans, partnership drawings and partnership capital balances

  • 15. 
    In a partnership liquidation, the assets of the partnerships shall be applied lastly to
    • A. 

      Those owing to outside creditors

    • B. 

      Those owing to the partners with respect to their share of the profits

    • C. 

      Those owing to the partners with respect to their capital contibutions

    • D. 

      Those owing to inside creditors in the form of loans or advances for business expenses by the partners

  • 16. 
    In a partnership liquidation, the assets of the partnerships shall be applied firstly to
    • A. 

      Those owing to outside creditors

    • B. 

      Those owing to the partners with respect to their share of the profits

    • C. 

      Those owing to the partners with respect to their capital contibutions

    • D. 

      Those owing to inside creditors in the form of loans or advances for business expenses by the partners

  • 17. 
    If a partner is insolvent, his personal properties shall first be distributed
    • A. 

      To the partners by way of additional contributions when the assets of the partnership were insufficient to settle all obligations

    • B. 

      To partnership and separate creditors in the ratio of their loan exposures

    • C. 

      To separate creditors

    • D. 

      To partnership creditors

  • 18. 
    If a partner is insolvent, his personal properties shall last be distributed
    • A. 

      To the partners by way of additional contributions when the assets of the partnership were insufficient to settle all obligations

    • B. 

      To partnership and separate creditors in the ratio of their loan exposures

    • C. 

      To separate creditors

    • D. 

      To partnership creditors

  • 19. 
    Which of the following will not result in dissolution of a partnership?
    • A. 

      Incapacity of a partner

    • B. 

      Negative capital balance of a partner

    • C. 

      Bankruptcy of a partner

    • D. 

      Admission of a new partner

  • 20. 
    Right of the corporation to continue as a juridical entity for the period stated in the Articles of incorporation despite the death of any shareholder:
    • A. 

      Right of succession

    • B. 

      Right of pre-emption

    • C. 

      Right of existence

    • D. 

      None of the above

  • 21. 
    • A. 

      An artificial being with a personality separate and apart from its shareholders

    • B. 

      Created by operation of law

    • C. 

      Enjoys right of succesion

    • D. 

      Has the powers, attributes and properties expressly authorized by law of incident to its existence

    • E. 

      None of the above

  • 22. 
    The arbitrary value assigned to a share of stock is called
    • A. 

      Market value

    • B. 

      Par value

    • C. 

      Liquidation value

    • D. 

      Book value

    • E. 

      None of the above

  • 23. 
    No par value share can not be issued
    • A. 

      For less than P5.00

    • B. 

      With preference as to assets or as to dividends

    • C. 

      Without being fully paid

    • D. 

      All of the above

  • 24. 
    It is the supreme authority in matters of management of the regular and business affairs of a corporation 
    • A. 

      Board of directors

    • B. 

      Majority shareholders

    • C. 

      Minority shareholders

    • D. 

      None of the above

  • 25. 
    Which of the following results in the dissolution of a partnership?
    • A. 

      The receipt of share in profit by an existing partner

    • B. 

      The withdrawal of a partner from a partnership

    • C. 

      The contribution of additional assets to the partnership by an existing partner

    • D. 

      The winding up of the partnership and the distribution of remaining assets to the partners.