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Accounting 2 Prelims

True/False
Indicate whether the statement is true or false.

____ 1. Adjustments prior to the formation of partnership may be omitted since these will not affect in any manner to
the partner’s capital.

____ 2. An industrial partner is admitted to the partnership by means of a memorandum entry only.

____ 3. In revaluing the non-cash assets which has “contra-assets”, the amount of adjustment is reflected in the asset
itself.

____ 4. By fair market value, we mean the “estimated price of asset that the seller is willing to sell and the buyer is
willing to buy in an open market”.

____ 5. An industrial partner is like a general partner who is also liable to partnership’s debts up to the extent of his
personal assets.

____ 6. The partnership form of business organization is suited to the practice of profession because of personalize
nature of the service offered by professionals.

____ 7. One disadvantage of partnership over sole is when there is net loss, because it can be shared to the other
partners.

____ 8. A partnership must be in writing when the capital of the partnership is P5,000.

____ 9. In a partnership, there is only one capital and drawing account there only being one juridical personality, the
partnership.
____ 10. A creditor can run after the personal assets of a general partner and industrial partners but not
the limited partners.
Accounting 2 Prelims
Answer Section

TRUE/FALSE

1. ANS: F PTS: 1
2. ANS: T PTS: 1
3. ANS: F PTS: 1
4. ANS: T PTS: 1
5. ANS: T PTS: 1
6. ANS: T PTS: 1
7. ANS: F PTS: 1
8. ANS: T PTS: 1
9. ANS: F PTS: 1
10. ANS: T PTS: 1

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