AFAR 1

THEORY OF ACCOUNTS
d 1 Which of the following statements concerning the formation of partnership is correct?
a PFRS allows recognition of goodwill arising from the formation of partnership
b The juridical personality of the partnership arises from the issuance of certification of registration
c The parties may become partners only upon contribution of money or property but not industry or
service
d The capital to be credited to each partner upon formation may not be the amount actually contributed
by each partner

b 2 Under the GAAP, what is acceptable reason when the amount credited to a partner is greater than the amount
actually contributed by such partner during partnership formation?
a Recognition of goodwill by virtue of special skills or reputation of said partner
b Receipt or transfer of capital from other partner by virtue of partner's agreement resulting to bonus
to the said partner
c Recognition of impairment loss on the property contributed by said partner
d When there is bonus given by said partner to the other partners

c 3 He refers to a partner who contributed not only money and property but also industry to the newly formed
partnership
a Industrial partner c Capitalist-industrial partner
b Nominal partner d Capitalist partner

d 4 It refers to a type of partnership wherein all partners re liable to the creditors pro-rata up to the extent of
capital contribution after the partnership's assets are exhausted
a General partnership c Limited partnership
b Partnership by estoppel d Particular partnership

C 5 Regina, Jessica and Nataly entered into a contract of partnership with a total contribution of P 5,000.
The parties failed to register its article of co-partnership with the Securities and Exchange Commission.
Which of the following statements is not correct?
a The contract of partnership is void because the law provides that when the capital contribution is at
at least P 3,000, it must be registered with Securities and Exchange Commission (SEC)
b The contract of partnership will bind third persons
c The contract of partnership remains to be valid
d The partnership business does not obtain juridical personality for failure to register with SEC
 Pre-Finals 1

FORMATION

certification of registration
property but not industry or

the amount actually contributed

ner is greater than the amount

agreement resulting to bonus

dustry to the newly formed

ndustrial partner

o-rata up to the extent of

ribution of P 5,000.
xchange Commission.

n the capital contribution is at

mmission (SEC)

re to register with SEC