Which of the following is not a withdrawal that may
be found in a partnership’s drawing account?
Response: All of the above may be found in a
drawing account
As a partnership agreement calls for allocation of
profits and losses by salary allocations,…
Response: The bonus criteria would not be used
According to the Philippine Civil Code, if only the
share of each partner in the profits has been…
Response: The same as the sharing in profits
You and I are partners. We share in profits equally.
Because I am the managing partner, I am entitled
to a 20% bonus computed on profit before
deducting the bonus.
If our partnership earns profit of P1,000,000 (before
deducting my bonus), your share would be
P500,000.
Response: False
A and B formed a partnership. The partnership
agreement stipulates that annual salary allowances
of P50 for A and P30 for B will be provided and any
remaining amount of profit or loss shall be divided
equally
During the period, the partnership earned profit of
P100 before salary allowances. A’s share in the
partnership profit is P10.
Response: False
Which of the following statements is true
concerning the treatment of salaries in partnership
accounting?
Response: Partner salaries may be used to allocate
profits and losses; they are not considered
expenses of the partnership
Which of the following is not a component of the
formula used to distribute partnership profits to the
partners?
Response: Interest on notes to partners
Which of the following statements is correct with
regard to drawing accounts that may be used by a
partnership?
Response: Drawing accounts are closed to the
partners’ capital accounts at the end of the
accounting period
According 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
Response: In proportion to what the partners may
have contributed but the industrial partner shall not
be liable for the loss
Mr. A and Ms. B formed a partnership. Mr. A
contributed P1,000,000 cash, while Ms. B will
contribute her services. Mr. A is a capitalist partner
while Ms. B is an industrial partner.
Response: True
Which of the following would be least likely to be
used as a means of allocating profits among the
partners who are active in the management of the
partnership?
Response: Interest on average capital balances
A and B formed a partnership. The partnership
agreement stipulates that annual salary allowances
of P50 for A and P30 for B will be provided and any
remaining amount of profit or loss shall be divided
equally
During the period, the partnership incurred loss of
P100 before salary allowances. A’s share I in the
partnership loss is -P40.
Response: True
Drawings
Response: Are the same nature as withdrawals
Withdrawals from the partnership accounts are
typically not used
Response: To record interest earned on a partner’s
capital balance
Mr. C, the managing partner in ABC Co. is entitled
to a 20% bonus on profit after partners’ salaries
and bonus. ABC co. reported profit of P360 after
deducting the partners’ salaries but before
deducting Mr. C’s bonus. Mr. C’s bonus is P80.
Response: False