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Cba accounting 2 deans exam
Accountancy and Business Management (ABM001)
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College of Accounting Education Deans Examination
Two or more persons bind themselves to contribute money, property, o industry to a common fund, with the intention of dividing the profit among themselves. a. Corporation c. Sole Proprietorship b. Partnership d. Cooperative
Partnerships that are generally associated with the practice of law, public accounting, medicine and other professions are called a. Joint venture c. General Professional partnership b. Cooperative d. Private partnership
Which characteristics of a partnership that any partner can bind the other partners to a contract if he is acting within his express or implied authority? a. Mutual Contribution c. Co-ownership of Contributed Assets b. Mutual Agency d. Partner’s Equity account
A partnership which has complied with all the legal requirements for its establishment a. De jure partnership c. Universal partnership b. De facto partnership d. Limited partnership
A partner who does not take active part in the business of the partnership and is not known as a partner. a. Silent partner c. Dormant partner b. Secret partner d. Nominal partner
Which of the following is not a characteristic of partnerships? a. Mutual agency c. Limited life b. Voluntary association d. Limited liability
Non-cash assets invested into a partnership are recorded at a. Their fair market value b. Their original cost c. Their carrying value d. Zero
On July 1, Mar and Bebs formed a partnership, agreeing to share profits and losses in the ratio of 4:6 respectively. Mar contributed a parcel of land that cost P25,000. Bebs contributed P50,000 cash. The land was sold for P50,000 on July 1, three hours after formation of the partnership. How much should be recorded in Mar’s capital account on formation of the partnership? a. 50,000 b. 20,000 c. 25,000 d. 10,
Ms. Nap and Mr. Polis started a partnership. Nap contributed a building that she purchased 10 years ago for 100,000. The accumulated depreciation on the building on the
date of formation of the partnership is P25,000 and the fair value is P110,000. For what amount will Nap’s capital account be credited on the books of the partnership? a. 110,000 b. 75,000 c. 110,000 d. 25, 10. The most equitable distribution of partnership profit based on capital contributions uses which of the following capital concept? a. Equally c. ending capital b. Average capital d. beginning capital
If a partnership agreement does not specify how profit is to be allocated, profits or losses should be allocated a. Equally b. In accordance with their capital contribution c. In proportion to the average of capital invested during the period. d. Equitably so that partners are well compensated for their time and effort.
Which of the following distributions would be made last in dividing profits to the partners when interest on capital balances and salary allowances are involved? a. Salary allowances b. Interest on capital balances c. Equally d. Specified Ratio
A 1:3:2 ratio is the same as a. 10%:30%:20% b. 1/10: 3/10: 2/ c. 1/6: ½: 1/ d. 20%: 50%: 30%
Partners De Guzman and Tugade receive a salary allowance of P30,000 and P70,000, respectively, and share the reminder equally. If the company earned P40,000 during the period, what is the effect on Tugade’s capital? a. P30,000 decrease b. P50,000 increase c. P90,000 increase d. P40,000 increase
Partners Manlogat, Vidal and Calingasan have capital balances in a partnership of P150,000, P100,000 and P200,000, respectively. Loss for the year was P330,000. What will be the capital balance for Vidal if the three partners share profits and losses at 4:3:3 ratio, respectively? a. P1,000 credit balance b. 10,000 debit balance c. 99,000 debit balance d. 10,000 credit balance
Partners Manlogat, Vidal and Calingasan have capital balanes in a partnership of P150,000, P100,000 and P200,000, respectively. Loss for the year was P330,000. What will be Vidal’s capital balance if Manlogat gets an P180,000 salary, Vidal gets a P70,000 salary, and Calingansan gets a 10% interest on his beginning balance with the remainder being divided at a 2:2:1 ratio, respectively
Rebecca Miranda and Stephanie Calamba are partners with capital balances of P400,000 and P200,000, respectively. They share profits in the ratio of 3:1. The partners agreed to admit Theodore Calaguas as a member of the firm. Assumed that Theodore Calaguas invested P240,000 for one-third interest in the business. The total agreed capital is P840,000. The total capital credited to Theodore Calaguas is equal to a. 840,000 c. 240, b. 280,000 d. 560,
The withdrawal of the partner may be accomplished by either of the following ways except a. By selling his equity interest to one or more of the remaining partners. b. By selling his equity interest to an outsider c. By selling his equity interest to the partnership d. By the death of the partner.
Partnership dissolution occurs due to following reasons except a. Purchase of an interest from one or more of the existing partner by outsider b. Investment of asset in the partnership by the existing partner c. Withdrawal or retirement of a partner d. Incorporation of the partnership
It is the sum of the capital balances of the old partners and the actual investment of the new partner? a. Total Agreed Capital c. Bonus b. Total Contributed Capital d. Net Asset
Rebecca Miranda and Stephanie Calamba are partners with capital balances of P400,000 and P200,000, respectively. They share profits in the ratio of 3:1. The partners agreed to admit Theodore Calaguas as a member of the firm. Assumed that Theodore Calaguas invested P240,000 for one-third interest in the business. The total agreed capital is P840,000. Journal Entry to record the admission include a. Debit to Rebecca Miranda capital of P30, b. Debit to Stepahnie Calamba capital of P30, c. Credit to Rebecca Miranda capital of P30, d. Credit to Stepahanie Calamba capital of P30,
Rebecca Miranda and Stephanie Calamba are partners with capital balances of P400,000 and P200,000, respectively. They share profits in the ratio of 3:1. The partners agreed to admit Theodore Calaguas as a member of the firm. Assumed that Theodore Calaguas invested P240,000 for one-third interest in the business. The total agreed capital is P840,000. The total contributed capital equal to a. 840,000 c. 560, b. 600,000 d. 240,
When a partner withdraws from a partnership taking assets that represents less than his capital balance a. No bonus results b. The remaining partners receive a bonus c. The withdrawing partner receive a bonus d. The remaining partners owe the withdrawing partner the difference.
Nigell paid Trish P600,000 for her P400,000 interest in a partnership. On the partnership books a. Nigell will receive a bonus b. Nigell will give up a bonus c. Nigell will have a capital balance of P600, d. Nigell will have a capital balance of P400,
Which of the following results in the dissolution of a partnership? a. The winding up of the partnership and the dissolution of remaining assets to the partners. b. The contribution of additional assets to the partnership by an existing partner. c. The receipt of share in profit by an existing partner d. The withdrawal of a partner from a partnership
The admission of a new partner under the bonus method will result in a. Bonus to either the new partner or the old partners, but not both b. Bonus to the old partners only c. Bonus to the new partner only d. None of the above
A partnership agreement most likely will stipulate that assets be reappraised when a. new partner is admitted to the partnership b. profits and losses are being distributed c. a partner leaves the partnership d. the partnership is liquidated
Total partners’ equity will not change when withdrawing partner a. Sells his interest to a new or remaining partner b. Withdraws assets equal to his capital balance c. Withdraws assets amounting to less than his capital balance d. Withdraws assets amounting to greater than his capital balance
When Rivera retired from the partnership of Rivera, Nolasco and Andres, the final settlement of Rivera’s interest exceeded Rivera’s capital balance. They share profits and losses equally. Under bonus method, the excess a. Was recorded as goodwill b. Was recorded as expense c. Had no effect on the capital balances of Nolasco and Andres d. Reduced the capital balances of Nolasco and Andres
The conversion of non-cash assets into cash is referred to as
c. Withdrawal d. Liquidation
Nozuelo, Campillo and Sorio are partners sharing profits and losses equally. The partnership is being liquidated and after all assets are converted to cash and all liabilities paid, there remained P52,000 cash available for distribution to the partners. Nozuelo and Campillo have capital balances of P40,000 and P30,000, respectively. Sorio has a debit balance of P18,000 in her capital account. If Sorio is personally insolvent, how much cash will be distributed to Nozuelo? a. P26,000 c. P40, b. P31,000 d. P34,
The owners of shares in stock corporation are called a. Incorporators c. members b. Promoters d. shareholders
The following are the steps in the creation and organization of a corporation except a. Incorporation b. Promotion c. Formal organization and commencement of business operation d. None of the above
Choose the situation which illustrates the minimum requirement of the law to corporate formation: Authorized Capital Subscribed capital Paid-in capital a. P100,000 P 25,000 P5, b. P100,000 P5,000 P5, c. P 50,000 P 12,500 P3, d. P 60,000 P15,000 P 5,
The arbitrary value assigned to a share of stock is called a. Market value c. Liquidation value b. Par value d. book value
Persons who compose the corporation whether as shareholders or members are called a. Corporators c. promoters b. Incorporators d. subscriber
Incorporators a. A number of natural persons not less than 5 but not more than 15 b. Majority are residents of the Philippines c. Must own or be a subscriber to at least one share of the share capital of the stock corporation to be formed d. Need not be citizens of the Philippines e. All of the above
The par value of ordinary shares is equal to a. The amount received by the corporation when the share was originally issued. b. The amount at which the share is currently trading in an organized market
c. A designated peso amount per share established in the articles of incorporation d. The book value of the ordinary shares
A corporation is being organized with an authorized share capital of P50,000. How much of this 50,000 should be subscribed and how much must be actually paid? Amount Subscribed Amount paid a. P12,500 P3, b. 10,000 2, c. 25,000 6, d. 12,500 5,
An advantage of a partnership a. Limited liability b. Ability to raise capital c. Ease of formation d. Transfer of ownership
An advantage of a corporation is a. Ease of formation b. Limited liability c. Regulation d. Double taxation
It is the process of bringing together the incorporators or the persons interested in the business, procuring subscriptions or capital for the corporation and of setting in motion the machinery that leads to the incorporation of the corporation itself. a. Promotion c. Incorporation b. Creation d. Organization
These are shareholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and are signatories to said articles of incorporation. a. Corporators c. Incorporators b. Members d. Subscriber
The minimum issue price of the shares is a. Par value c. a and b b. Stated value d. Neither a nor b
At the time of incorporation, the minimum subscription is a. 25% of issued shares b. 25% of authorized shares c. 25% of subscribed shares d. All of the above
Which of the following is the possible pro-forma entry for issuing a par value share capital (with par value)
d. None of the above
Describes the ability of a company to meet current debt obligations with assets that are readily available a. Current ratio c. quick ratio b. Working capital d. none of the above
Measures the company’s ability to collect from credit customers a. Average age of receivables b. Inventory turnover c. Accounts receivable turnover d. None of the above
Shows the percentage of the company’s assets financed by debt a. Time interest earned ratio b. Debt to total assets ratio c. Equity to total assets ratio d. None of the above
A firm has a profit margin of 15 percent on sales of 20,000,000. If the firm has debt of 7 ,500,000, total assets of 22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firm's ROA? a. 8% c. 12% b. 10% d. 13%
74 Incorporated has a current ratio = 1, and a quick ratio equal to 1. The company has 2 million in sales and its current liabilities are 1 million. What is the company’s inventory turnover ratio? a. 5 c. 5. b. 5 d. 6.
Last year, Quayle Energy had sales of 200 million, and its inventory turnover ratio was 5. The company’s current assets totaled 100 million, and its current ratio was 1. What was the company’s quick ratio? a. 1 c. 0. b. 1 d. 2.
Vance Motors has current assets of 1 million. The company’s current ratio is 1, its quick ratio is 0, and its inventory turnover ratio is 4. The company would like to increase its inventory turnover ratio to the industry average, which is 5, without reducing its sales. Any reductions in inventory will be used to reduce the company’s current liabilities. What will be the company’s current ratio, assuming that it is successful in improving its inventory turnover ratio to 5? a. 1 c. 1. b. 1 d. 0.
Which of the following would best explain a situation where the ratio of (net income/total equity) of a firm is higher than the industry average, while the ratio of (net income/total assets) is lower than the industry average? a. The firm's net profit margin is higher than the industry average. b. The firm's asset turnover is higher than the industry average.
c. The firm's equity multiplier must be lower than the industry average. d. The firm's debt ratio is higher than the industry average.
A firm has a lower quick (or acid test) ratio than the industry average, which implies. a. the firm has a lower P/E ratio than other firms in the industry. b. the firm is less likely to avoid insolvency in short run than other firms in the industry. c. the firm may be more profitable than other firms in the industry. d. A and B. e. B and C.
An example of a liquidity ratio is _______. a. fixed asset turnover b. current ratio c. acid test or quick ratio d. A and C e. B and C
A firm has a higher asset turnover ratio than the industry average, which implies a. the firm has a higher P/E ratio than other firms in the industry. b. the firm is more likely to avoid insolvency in the short run than other firms in the industry. c. the firm is more profitable than other firms in the industry. d. the firm is utilizing assets more efficiently than other firms in the industry. e. the firm has higher spending on new fixed assets than other firms in the industry.
Cba accounting 2 deans exam
Course: Accountancy and Business Management (ABM001)
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