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1. Under the bonus method. any increase or decrease in the capital credit of a partner is a. Deducted from or added to the capital credits of the other partners b. Recognized as goodwill c. Recognized as expense d. Deferred and amortized to prot or loss 2. Mr. I and Mr. M formed a partnership business. Mr. I contributed equipmentwith fair value of P2M. However, the partners agreed that Mr. I's ca pital account will be debited for PQQM. Which of the following statements is correct? a. The P.2M excess credit is treated as a bonus to Mr. M. b. Mr, M is probably bringing in expertise or special skill to the business. c. Mr. M's capital account will be debited for P.2M. cl. This is unacceptable. Mr. I's capital credit should be P2M. 3. The asset contributions of partners to a partnership are initially measured at: a. Fair value b. Original cost to the taxpayer c. Tax basis d. Any at these 4. Under the bonus method, the asset contributed by a partner receiving a bonus is a. Debited at an amount greater than the asset's lair value b. Debited at an amount less than the asset's fair value c. Debited at an amount equal to the asset's fair value d. Neither a or b 5. Mr. X and Y agreed to form a partnership. The fair values of the partners' net contributions vary; however. the partners agreed to have equal capitat credits. Cash settlement shall be made between them for the dilference. Which of the following statements is correct? a. The asset contributions of the partners shall be debited for equal amounts b. The cash settlement between the partners will either increase or decrease the total partnership capital c. The cash settlement between the partners will not be recorded in the partnership books. a. Mr. X shail pay Mr. Y to have their capital balances equal. 6. A partnership is alant I. ACCOunting entity lI. Taxable entity 0. I only b. ll only c. Neither | or II -_ Old National Highway, Brgy. Nueva, City of San Pedro, Laguna 4023 3 847-7376 M slac.ofcial.educ@gmail.com cl. Both I and II 7. Partner X contributed equipment to the X'r'l partnership. The equipment cost P150000 with accumulated depreciation of PIODOO but had a fair value at P70,000 at the date the partnership received it. At what amount should the equipment be reported? a. P 70,000 b. P 60,000 c. P 10,000 d. P 50,000 8. A partner's drawing account is: a. An expense account b. A capital account c. A contra-capital account a. A liability account 9. The partners' drawing accounts are used a. To record the partner's salaries b. To reduce the partner's capital account balances at the end at the period c. In the same manner as the loan accounts d. To record the partners' share of net income or loss for an accounting period 10. A partner's withdrawal or asserts Irom a partnership that is considered a permanent reduction in the partner's equity is debited to the partner's: 0. Drawing account b. Retained earnings account c. Capital acc0unt cl. Loan receivable account I ItAccording to the Philippine Civil Code, in the absence of a stipulation on the sharing of profits or losses, partnership profits and losses shall be shared by the partners or. Equally b. In accordance with the partnership agreement c. In proportion to what the partners may have contributed d. In proportion to what the partners may have contributed but the partner shall not be liable tor losses