PHINMA UNIVERSITY OF PANGASINAN

BAM 062: PROJECT MANAGEMENT (AFAR ADVANCE TOPIC)

Name: Date:
Year and Section: Score:
Submit all questionnaires and answer sheet
MCQ: SHADE YOUR FINAL ANSWER IN THE GIVEN ANSWER SHEET

1. A partnership is primarily formed for what main purpose?

A. To limit personal liabilities

B. To divide corporate stocks

C. To conduct business and share profits

D. To register a new corporation

2. Which of the following best describes a partnership?

A. A formal contract between a company and its suppliers

B. An agreement between individuals to share profits and losses

C. A merger between two corporations

D. A group incorporated by law

3. When two friends decide to open a bakery without any formal papers, it is an
example of:

A. Corporation

B. General partnership

C. Limited liability company

D. Franchise agreement

4. What characteristic means a partnership is treated as a “separate person” under

A. Mutual Agency

B. Co-ownership of Property

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C. Separate Legal Personality

D. Ease of Formation

5. If one partner signs a business contract on behalf of the partnership, it is due to which
characteristic?

A. Limited liability

B. Mutual agency

C. Unlimited life

D. Partnership dissolution

6. In a partnership, who owns the properties contributed?

A. The original contributor

B. The managing partner only

C. All partners jointly

D. The government

7. Which event would not immediately dissolve a partnership?

A. Death of a partner

B. Bankruptcy of the partnership

C. Expansion to a new branch

D. Insolvency of a partner

8. Which characteristic highlights that personal assets can be used to pay for
partnership debts?

A. Limited liability

B. Unlimited liability

C. Separate entity

D. Easy formation

9. A partnership must have approval from other partners to admit a new partner
because of:

A. Co-ownership of property

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B. Transfer of ownership restriction

C. Separate legal personality

D. Unlimited liability

10. In a general partnership:

A. Partners have limited liability

B. Only selected partners manage the business

C. All partners have unlimited liability

D. There are only investors, no managers

11. In a limited partnership, the limited partner:

A. Is responsible for management decisions

B. Has no liability at all

C. Can only lose what they invested

D. Shares unlimited liability with the general partner

12. Which of the following partnerships protects partners from liabilities caused by other
partners’ mistakes?

A. General partnership

B. Limited partnership

C. Limited liability partnership

D. Sole proprietorship

13. In a law firm structured as an LLP, if one lawyer commits malpractice, the other partners:

A. Are equally liable

B. Are fully protected from personal loss

C. Lose their capital investments

D. Must immediately dissolve the partnership

14. Which of the following is an advantage of a partnership?

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A. unlimited personal liability

B. Double taxation

C. Shared management responsibilities

D. Complex government regulation

15. One major disadvantage of a partnership is:

A. Strict formation process

B. Possibility of conflict between partners

C. Limited tax benefits

D. Too much government intervention

16. A partnership compared to a corporation generally has:

A. More available capital

B. Less capital

C. Higher government taxes

D. Shareholders instead of partners

17. When a partnership records partners’ investments, this stage is called:

A. Operations

B. Liquidation

C. Formation

D. Dissolution

18. Dividing the profits between partners relates to which stage of partnership
accounting?

A. Formation

B. Operations

C. Dissolution

D. Liquidation

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 19. If a partner dies and the partnership winds up operations, this is classified as:

A. Formation

B. Operations

C. Dissolution

D. Merger

20. Selling partnership assets to pay debts during closure is called:

A. Division

B. Liquidation

C. Formation

D. Restructuring

21. Contributions by partners should be recorded at:

A. Historical cost

B. Market price 10 years ago

C. Fair market value at contribution date

D. Partner’s estimate

22. If a partner contributed a machine originally bought for ₱100,000 but now
valued at ₱60,000, how much should be recorded?

A. ₱100,000

B. ₱80,000

C. ₱60,000

D. ₱50,000

23. A partner’s share of ownership is reflected in:

A. Drawing account

B. Capital account

C. Revenue account

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D. Expense account

24. Money withdrawn by a partner for personal use is recorded in:

A. Drawing account

B. Capital account

C. Retained earnings

D. Cash account

25. An account titled “Receivable from Partner” means:

A. The partner owes money to the partnership

B. The partner earned interest

C. The partner was overpaid

D. The partner has invested additional capital

26. A bonus occurs when:

A. A partner receives more capital than their contribution

B. A partner contributes only cash

C. The partnership borrows funds

D. None of the above

27. When a bonus is given, it is usually adjusted against:

A. Partnership revenues

B. Other partners’ capital accounts

C. Partnership expenses

D. Partnership drawings

28. A partnership that opens a bakery where only one partner works daily and the
other only invests money is most likely a:

A. LLP

B. General partnership

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C. Limited partnership

D. Corporation

29. In a general partnership, if Partner A enters a supply contract, who is liable?

A. Only Partner A

B. The whole partnership

C. The supplier

D. Only the general partner

30. Which of the following events will NOT cause dissolution of a partnership?

A. Retirement of a partner

B. Death of a partner

C. Purchase of a new equipment

D. Insolvency of a partner

31. If a partner wants to sell his share to another person, what must happen?

A. No need for approval

B. Approval from creditors

C. Approval from other partners

D. Must dissolve partnership

32. Which type of partnership limits a partner’s loss to their amount invested?

A. General partnership

B. Limited liability partnership

C. Limited partnership

D. Professional corporation

33. Compared to corporations, partnerships generally have:

A. Higher start-up costs

B. Heavier regulations

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C. Easier formation

D. Harder liquidation processes

34. In an LLP, liability for wrongful acts of another partner is:

A. Full and equal

B. Shared equally among partners

C. Limited to the partner who committed the act

D. Distributed by profit share

35. Which partnership form is often chosen by accounting or law firms?

A. Limited partnership

B. LLP

C. General partnership

D. Corporation

36. A partner’s personal car is used temporarily for business delivery. What is the
correct treatment?

A. Partnership property

B. Personal property

C. Loan to the partnership

D. Treated as donation

37. Unlimited liability means:

A. Only the capital is at risk

B. Personal and business assets are at risk

C. Only investments are protected

D. Only profits can be affected

38. An advantage of sharing workload in a partnership is classified under:

A. Ease of formation

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B. Flexibility in decision making

C. Shared management

D. Greater capital

39. When a partner dies and the partnership continues with new agreements, this is
called:

A. Liquidation

B. Reorganization

C. Dissolution and reformation

D. Extension

40. If two partners contribute cash and a third partner contributes land, under partnership
rules:

A. Land is recorded at its original cost

B. Land is recorded at book value

C. Land is recorded at current fair value

D. Land is not recorded

STRAIGHT PROBLEM QUESTION: PROVIDE ANY NECESSARY SOLUTION. WRITE YOU ANSWER
AND SOLUTION AT THE BACK OF THE 1ST UNTIL 6TH PAGE

I. Ron and Von decided to form a partnership on March 15, 2019. Their balance sheet on
this date was:

ASSETS Ron Von

Cash P 65,625 P164,062.50

Accounts Receivable 1,487,500 896,875

Merchandise
875,000 885,937.50
Inventory

Equipment 656,250 1,268,750

TOTAL ASSETS P 3,084,375 P 3,215,625

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 LIABILITIES AND CAPITAL

Accounts Payable P 459,375 P 1,159,375

Capital
2,625,000 2,056,250
(UNADJUSTED)

TOTAL LIAB. AND

Adjustment:

A. Equipment of Ron is under depreciated by P87,500 and that Von is overstated by

B. Allowance for Doubtful Accounts is to be set up amounting to P 297,500 for Ron and P
196,875 for Von

C. Inventories of P 21,875 & P 15,312 are worthless in the books of Ron and Von
respectively.

D. The partnership for a profit and loss ratio of 70% to Ron and 30% to Von.

QUESTIONS

 Upon the formation of the partnership, how much is the capital of Ron and Von,
respectively?

 Assuming that the capital balances are to be equaled to their P&L ratio, how much is the
capital of Ron and Von, respectively?

 Compute for the total assets of the partnership.

II. On January 1, 2020, River and Vince both sole proprietors decides to form a partnership.
According to their agreement they will split profits and losses 75:25 and their initial
capital will also reflect that ratio.

The following are River and Vince’s Statements of Financial Position as of December 31, 2019.

River Proprietor

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 Assets Liabilities & Capital

Cash P50,000 Accounts payable 65,000

Accounts
100,000 Accrued Expenses 55,000
receivable

Inventories 75,000 Notes Payable 80,000

quipmer 250,000 Health, capital 90,000

Acc Depr -
(185,000) Total 290,000
Equipmer

Total 290,000

Vince Proprietor

Assets Liabilities & Capital

Cash P30,000 Accounts payable 75,000

Accounts
110,000 Accrued Expenses 90,000
receivable

Inventories 85,000 Notes Payable 100,000

Equipment 300,000 Health, capital 160,000

Acc Depr -
(100,000) Total 425,000
Equipmer

Total 425,000

The values reflected in the Statement of Financial Position are already at Fair Values, except for
the following accounts:

River’s Accounts Receivable is now 20,000 less that what is stated in his Statement of Financial
Position. Both Inventories of River and Vince are now 90,000 and 70,000 respectively.
Equipment for Vince has an assessed value of 275,000, appraised value of 250,000 and book
value of 200,000.

Additional accrued expenses are to be established in the amount of 10,000 for Vince only while
additional accounts payable in the amount of 5,000 for River. it is also agreed that all liabilities

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will be assumed by the partnership, except for the notes payable of Vince which will be
personally paid by him.

1.How much is the adjusted capital balance of Fitness upon formation?

A. 91,250
B. 185,000
C. 285,000
D. 310,000

2.How much is the Capital credit to River upon Formation

A. 80,000

B. 273,750

C. 292,000

D. 255,500

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