1. When Asset Revaluation method is used in the admission of a partner, the *0/1 difference between the agreed capital and the contributed capital shall be divided among the old partners using the profit and loss ratio. O Tne @ false Correct answer © Twe 2. When a new partner purchases 30% interest of equity from all the partners *1/1 upon his admission, the total equity of the partnership will not change @ Te O False3. Inthe admission of a new partner by investment, a positive asset revaluation is attributable to the old partners if the capital credit to the new partner is less than his capital contribution. @ True CO False Correct answer @ False 4, Anew partner maybe admitted without an investment and without the tecognition of capital interest. © True @ False Correct answer © Tne 40/1 “or5. Anew partner was admitted to the partnership by paying P300,000 in *0/1 cash. If the net assets of the partnership are still the same after his admission, then the new partner must have received a bonus upon his admission. @ Tue O False Correct answer @ False 6. When a new partner is admitted, the partnership my continue operations “1/1 based on a new contract among partners. @® Te O False7. When a new partner purchases 25% interest of the equity from all of the old “1/1 partners upon his admission, total partnership equity Is increased by 25%. O Te ©@ False 8. Abonus given to the old partners by a new partner increases the capital *1/7 ‘account balances of the old partners. © te O False 9. Inthe new admission of a new partner by purchase, the new partner may “1/1 pay more than, less than or equal to the book value of the interest sold by any oral of the old partners. @ Tue O False10. There may be cases where the new partner may receive bonus and share *1/1 in the revaluation of assets during his admission © Tre @ False 11. A bonus to the remaining partners will result when cash paidto a retiring *1/1 partner is more than the retiring partner's capital balance, O Tne @ False 12. The partnership must measure net income or net loss for the fraction of | *1/1 the year up to the withdrawal date of withdrawing partner and allocate profit or loss according to the existing ratio. @ Te © False13. The asset revaluation at the time of retirement of one of the partners *1/1 maybe computed by dividing the excess payment to the retiring partner by his fraction of interest. © Tne O False 14. The sale of interest of the retiring partner to a new partner will require the *1/1 recognition of a gain or loss on the partnership books. O Te @ False 15. The determination of the capital interest of an incapacitated partners *1/1 similar to the determination of the capital interest of a retiring partner. @ Tne O False16. The bonus to the retiring partner reduces the capital accounts of the = *1/1 remaining partners in the partnership. @ Tre O False 17. Loans made by the partnership to the partners, as recorded on the an partnership books, reduces the interest of the retiring partner. @ Tre O False 18. Upon death of one of the partners, the remaining partners may continue = *1/1 operations based on the old Articles of Co-Partnership. Oo O Tne @ False19. Accounting for sale of a retiring partner's interest to the continuing ay partners is the same as sale to partnership. O Tue ©@ False 20. The bonus account is credited when there is transfer of capital fromthe *1/1 old to the new partner © Tue @ False 21, What is the effect by Advances made by the partnership toa partner's. *1/1 capital account? © Increase @ Decrease Tow cee21. What Is the effect by Advances made by the partnership to partners "1/1 capital account? O Increase ©@ Decrease O Noetfect © Cannat be determined 22. When the partnership assets increased with the consideration being equal *1/1 with the new partner's capital credit after paying more than the book value of interest acquired, there exists © eure © basset contribution by the new partner € of interest and investment by the new pariner O © purchase of interest; no asset revaluation © 4G. purchase of interest at more than book value with asset revaluation23. The partners' equity or capital in the partnership is referred to as * CO capital contribution ©@ _b capital credit © © -capital ratio © 4. book value 24, Total agreed capital can be determined by either of the following procedures except a. old partners’ contribution divided by their fraction of interest b. new partner's contribution multiplied by his fraction of interest c. new partner's contribution divided by his fraction of interest OoOo@°0 d. old and new partners’ agreed capital added Ww “un25. The accounting treatment for the sale of the interest of the retiring partner *1/1 to an outsider or remaining partners is the same as in © a.admission by investment © b. admission by purchase © sale of interest to the partnership © 4.botha and b 26. When the partnership purchased the interest of the retiring partner at less *1/1 than book value, there must be © a. bonus to remaining partners b. bonus to retiring partner . bonus to remaining partners/negative asset revaluation or both OOo d. bonus to retiring partner/positive asset revaluation or both27. The following should be considered in determining the interest ofthe = “1/1 retiring partner except © a:sharein asset adjustments © receivable from the partnershifp © © payableto e copariner d. sharein profits 28. If the agreed capital of the new partner is less than his capital contribution “1/1 with no adjustment in asset values, there exists ©@ @.bonus to old partners © ». bonus to new partner © &.no bonus from old or new partners d. both a and b29. When Louis retired from the partnership of LV Partnership, the final an settlement is less than Louis’ capital balance. Under the bonus method, the difference © a had no effect on the capital balances of the remaining partners O b.was recorded as asset adjustment © ¢ increases the capital balances of the remaining partners O 4.wes a revenue 30. If the total contributed capital exceeds total agreed capital with thenew “1/1 partner's investment equal to his capital credit, the admission resulted to a © a positive asset revaluation © b negative asset revaluation © « bonus to the old partners © 4. bonus to the new partner31. Aperson may become a partner in the partnership by all of the following “1/1 methods except a. investing in the partnership with a bonus to the new partner b. making a loan to the partnership c. investing in the partnership with a bonus to the old partners d. purchasing a partner's interest Oo0@0 32. If 2 new partner purchases his interest from an old partner, the only entry “1/1 on the partnership books is a credit to the purchaser's capital account with a debit to the © a bonus account O bcashaccount © capital account of the selling partner © 4 capital account of other partners33. Guess and Gucci are partners with capital ratio of 3:1 and a profit and loss *1/1 ratio of 2:1, respectively. The bonus method was used to record Hermes admittance as a new partner. What ratio should be used to allocate to Guess and Gucci the excess of Hermes’ contribution over the amount credited to his capital account? @ a Guess and Gucciss old profit and loss ratio © b. Guess and Gucci old capital ratio O Guess and Gucci's new relative profit and loss ratio CO 4. Guess and Gucci's new relative capital ratio 34. A partner may withdraw his interest at an amount equal to all of the an following except at O a book value ©@ » future expected value O less than book value © 4. more than book value35. A partner who withdraws his interest at book value receives assets * ©@ a equal to his capital interest CO b.with indeterminate value CO less than his capital interest © 4. above his capital interest Ww