NAME:
SCORE:
SECTION:
PROFESSOR:
True or False
1. In a contract of partnership, two or more persons bind themselves to contribute money, property or
industry to a common fund, with the intention of dividing the profit among themselves.
2. In a limited partnership, none of the partners has unlimited liability for the business debts.
3. A silent partner takes active part in the business of the partnership and is not known by outsiders to be a
partner.
4. A partner’s capital account is debited to reflect assets permanently withdrawn.
5. A limited partnership must have at least one general partner.
6. A partnership may be established for charity.
7. Assets invested in the partnership should be recorded at their cost of the partner.
8. All partnerships have a limited life and assets are co-owned by the partners.
9. A disadvantage of partnerships over corporations is the partners’ unlimited liability.
10. There is no income tax imposed on a partnership.
11. A partnership has a juridical personality separate and distinct from that of each of the partners.
12. A partnership must always have two or more owners.
13. One of the partners in a proposed partnership is a multi-millionaire. The stipulation in the articles of
partnership that his partner shall be excluded from sharing in the profits of the partnership is void.
14. All partnerships are subject to tax at the rate of 30% of taxable income.
15. When the partners invest assets other than cash in a partnership, their capital accounts should be credited
with the current fair market values of the assets.
16. A dormant partner is one who does not take active part in the partnership business though may be known
as a partner.
17. A partner usually retains title to assets contributed to a partnership, so that certain assets may be
identified as belonging to a given partner.
18. In a general partnership, each partner’s liability for losses is limited to his investment in the firm.
19. The basis of valuation for non-cash investments should be at values agreed upon by the partners.
20. A partnership has a limited life because any change in the relationship of the partners dissolves the
partnership.
21. The essence of partnership is that each partner must share in the profits of losses of the venture.
22. A partnership with a capital of P3,000 or more is valid even if it is unregistered with the Securities of
Exchange Commission.
