Fundamentals Of ing Ii 1r256h

Fundamentals of ing II Instruction: Encircle the letter that corresponds to the best answer. 1. ing is least likely described as a a. Service activity b. Language of business c. Discipline and an art d. Science 2. Which of the following describe the primary function of ing a. Provide financial report b. Planned processes to accumulate financial information c. Communicates financial reports d. Interprets financial information 3. A planned process to accumulate and store ing data is called a. Audit plan b. ing system c. Book keeping d. File system 4. Which of the following does not belong to inpits of ing information system a. ing terminology b. Source documents c. Recording financial information d. Ownership Structure 5. The ing cycle is best describe by the ing a. Inputs b. Processes c. Outputs d. All of the above 6. It refers to one of the functions of ing that tests the reliability of financial statements, traces fraudulent transactions and rectifies ing errors. a. Main function b. Basic function c. Audit function d. All of the above 7. It is an ing process of asg peso amounts to the reportable transactions and events. a. Measuring b. Communicating c. Identifying d. Recording 8. The recording of available ending inventory at the end of ing period is a/an a. Adjusting entry b. Closing entry c. Reversing entry d. Correcting entry

9. Statement 1: Official receipts must all recorded data in the books of s. Statement 2: The availability of ing documents enhances public reliance in the financial statements. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are not correct 10. Statement 1: The preparation of trial balance and working paper are both processes in the preparation of financial statements. Statement 2: The adjustments made in the working paper are journalized but not necessarily posted in the general ledgers. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are not correct d. Both statements are not correct 11. Statement 1: The adjustments for asset method of prepayment record asset debit and expense as credit. Statement 2: The “income summary ” is the other term use to describe “revenue and expense .” a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are not correct d. Both statements are not correct 12. These errors may not necessarily adversely affect future capital balances because they are selfcorrecting. a. Counter-balancing errors b. Perpetual ing errors c. Transposition errors d. ing treatment errors 1. A partnership is a. any association of two or more persons or entities b. an association of two or more persons to carry on a business for a profit, as co-owners. c. not a separate legal entity for legal purpose. d. an entity created by following statutory requirements. 2. The business organization which is not usually subject to income tax is a a. single proprietorship b. general professional partnership. c. general commercial partnership d. corporation 3. An advantage of the partnership as a form of business organization is that a. partners do not pay income taxes for their share in partnership income. b. a partnership is bound by act of the partners c. a partnership is created by mere agreements of the partners. d. a partnership maybe terminated by the death or withdrawal of a partner 4. The advantages of the partnership do not include a. ease of the formation

b. unlimited liability c. freedom from government regulations d. ease of decision making. 5. Which of the following is not a characteristic of a partnership business? a. unlimited life b. co-ownership c. mutual agency d. based on contract 6. Which of the following reasons would require a partnership agreement in writing andbe attached to the public instrument? a. contribution of personal property b. contribution of real property c. partnership capitalexceedsP3,000 d. Acceptance of a limited partner 7. Statement 1: A corporation shall exist for only a period of 50 years. Statement 2: A partnership has the power of succession if an heir is chosen as an assignee. a. only statement 1 is true b. only statement 2 is true c. Both statements are true d. Both statements are false 8. A partnership without a period of existence because its undertaking can only be terminated upon the decision of any of the partners or upon the consent of all the partners. a. partnership at will b. partnership with a fixed term c. t venture d. particular partnership 9. Statement 1: If the partnership is de facto, it cannot acquire legal personality to maintain an action against third persons. Statement 2: A partnership is not considered a separate entity from the partners when it involves debts to third party creditors. a. only statement 1 is true b. only statement 2 is true c. both statements are true d. both statements are false 10. A characteristic of a partnership form of a business which states that a partner, acting within the scope of the operations of the business, may blind the partnership and make it liable to third party parties. a. voluntary association b. separate legal personality c. mutual agency d. co ownership of assets 11. The owners of cooperative are called a. b. partners c. co-owners

d. stockholders 12. Statement 1: A partnership is liquidated if any of the partners died, became bankrupt or incapacitated. Statement 2: A partnership is automatically dissolved when there is a change in persons of partners. a. only statement 1 is true b. only statement 2 is true c. both statements are true d. both statements are false 1. Which of the following partnerships is established and organized incompliance with all the legal requirements for its existence? a. trading partnership b. general partnership c. de facto partnership d. de jure partnership 2. What do you call a partner who is appointed to ister the realization and distribution of partnership assets after dissolution? a. industrial partner b. managing partner c. liquidating partner d. ostensible partner 3. All of the following are true for both general and limited partnerships except, a. both have at least one general partner b. all the partners have the right to participate in profits of the business c. all partners are liable for all debts of the firm d. both are easily dissolved 4. The primary reason why an article of partnership should not be kept in secrete among the partners is the principle of a. transparency b. voluntary agreement c. mutual agency d. lawful agreement 5. A partnership ends its life when a. it changes its name b. unlimited liability exists c. a new partner is itted d. the partnership incurred losses 6. A principle which states that the business is separate and distinct from the owner(s). a. individual theory b. ing entity c. substance over form d. materiality 7. Which of the following statements is not correct? a. the partnership must consist at least two partners

b. the partnership must not be composed of five or more parties c. a partnership could also be formed by partners with professions different from each other d. a partnership form of a business is most applicable for the exercise of a common profession. 8. Which of the following is not normally a part of the articles of partnership? a. kinds of partners b. contribution of partners c. profit and loss agreement d. kinds of creditors 9. Statement 1: Both of the general and limited partners are personally liable for the partnership’s debts after the exhaustion of its assets. Statement 2: All partners in the limited partnership are not liable for the partnership’s debts after the exhaustion of its assets. a. only statement 1 is true b. only statement 2 is true c. both statements are true d. both statements are false 10. In general, partners have unlimited liability, but which type of partners does not have unlimited liability. a. industrial partners b. general partners c. limited partners d. silent partners 11. Which of the following terminates a partnership? a. A new partner is accepted in the partnership b. the specific objective for which the partnership was formed is achieved c. any of the partners becomes incapacitated d. any of the above 12. Statement 1: A partnership can be organized without complying with the legal requirements for its existence. Statement 2: A partner may not be known as one of the partners but takes an active part in running the business. a. only statement 1 is true b. only statement 2 is true c. both statements are true d. both statements are false 1. A form of business organization that maintains a capital for each of its owner is called a. sole proprietorship b. partnership c. corporation d. cooperative 2. This is used to closed the revenue and expenses f a partnership. a. accumulated earnings b. profit and loss c. revenue and expense

d. partner’s capital 3. This represents the partner’s share in the net assets of the partnership. a. partner’s capital b. partner’s deficit c. working fund d. drawing 4. A partner’s capital with debit balance is called a. partner’s equity b. partner’s deficit c. net operating loss d. capital loss 5. Which of the following does not increase the partner’s capital ? a. investments to the partnership b. share in the partnership’s net income c. accepting a new partner d. share in partnership’s net loss 6. This partner’s records the temporary withdrawals of a partner. a. partner’s drawing b. partner’s capital c. partner’s loan d. partner’s receivable 7. Which of the following is an asset ? a. partner’s capital b. partner’s drawing c. prepaid expense d. unearned income 8. What kind of business relationship is being depicted by a “loans receivable to partner’s ”? a. creditor-debtor b. employer-employee c. investor-investee d. payor-payee 9. Which of the following s has a normal credit balance? a. loans to partners b. partner’s capital c. partner’s drawing d. due from partner 10. Which of the following items is not a collectible from a partner? a. loans receivable from a partner b. loans to partner c. loans from partner d. due from partner 11. What is the meaning if the “loans payable from partner” has a credit balance a. There is an erroneously entry made

b. the entry must be reversed to loans payable c. the partnership becomes a debtor instead of a creditor d. the partnership becomes a debtor instead of a creditor 12. What is the basis of capital sharing if the partners do not have agreement as to the amount of their individual capital distribution? a. equal share b. based on profit and loss agreement c. fair value of asset contributed d. service Computational 1, The amount of partnership total asset is 500,000 and its liabilities amount to 100,000. How much is the amount of partner’s A capital if his interest in the partnership is 60%? a. 400,000 b. 300,000 c. 240,000 d. 160,000 2. The partnership capital is 300,000 and its total liabilities are 100,000. If the assets of the partnership are undervalued by 20%, and the liabilities are overvalued by 10%, how much is the correct amount of partner’s B capital if his interest in the partnership is 40%? a. 200,000 b. 164,000 c. 160,000 d.120,000 3. A, B and C formed a partnership by combining their separate business proprietorship. A contributed cash of 85,000. B contributed property with 75,000 carrying amount, a 90,000 original cost and 100,000 fair value. The partnership accepted responsibility for the 25,000 mortgage attached to the property. C contributed equipment with a 60,000 carrying amount, a 120,000 original costs and 80,000 fair value. The partnership agreements specifies that profits and losses are to be shared equally but is silent regarding capital contributions. Which partners has the largest capital balance upon partnership formation? a. A b. B c. C d. All partner’s capital balances are equal. 4. If the amount of liabilities is P165,000 and the percentage of owner’s claim in the total partnerships asset is 45%, the partnerships total assets would be a. 200,000 b. 300,000 c.366,667 d.255,750 5. If the net assets of the partnership is P250,000 and the total partnership’s liability is P350,000, the partnership total capital would be a. 600,000

b. 350,000 c. 250,000 d. 100,000 6. If the partnership’s cash is 25,000, the net assets are 250,000 and the total claim of outside creditors is 200,000, the total amount of the partnership’s noncash asset would be. a.525,000 b. 425,000 c. 325,000 d. 275,000 7. X and Y agreed to form a partnership. X is to contribute cash of 135,000 and the total claim of outside creditors if 200,000. It was agreed that the contribution of Y shall be recorded at an amount equal to 55% claim in the partnership. The total assets of the partnership upon formation is a. 335,000 b. 300,000 c. 245,000 d. 135,000 8. A and B formed a partnership. A to contribute his land (to be valued at P100,000) and B to contribute cash. The land of A two years ago at a cost of 80,000. The cash contribution of B is a.20,000 b.80,000 c.100,000 d.120,000 9. X, Y and Z agree to form a partnership, with X contributing 50,000 for 2/3 interest in the partnership, and Y and Z sharing equally in the remaining required capitalization. The total assets of the partnership upon formation is a. 100,000 b. 150,000 c. 75,000 d. 225,000 10. Partners A and B will contribute cash and C will contribute an equipment acquired two years ago at the cost of 100,000. The equipment is being depreciated on a straight-line method for 5 years without scrap value. The age of the equipment at the date of formation is one year and three months. At the date, the fair value of the equipment is 110,000. The amount to be credited to C capital is a. 25,000 b. 75,000 c. 100,000 d. 110,000