RFBT 4- PARTNERSHIP

Pre-test
1. All present properties are contributed
A. Universal partnership B. General partnership C, Limited partnership D. None of the above
2. Composed of capitalist and industrial partners
A. Universal partnership B. General partnership C. Limited partnership D. None of the above
3. They have priority if the partnership is insolvent:
A. Separate creditors B. Partnership creditors C. Both A and B D. None of the above
4. May contribute money, property or industry to the common fund:
A. Both general and limited partners C. General partners
B. Limited partner D. Capitalist partners
5. One who takes charge of the winding up to partnership affairs upon dissolution:
A. Silent partner B. General partner C. Ostensible partner D. Liquidating partner
6. A, B and C are partners. A contributed his services only; B, P20,000; and C, P10,000.The partnership was liquidated. After payment of the partnership’s
obligation, only P9,000 worth of assets remained. The share of A will equal to:
A. P3,000 B. Equal of share of B C. Equal of share of C D. None
7. A and B entered into a universal partnership of all present property. The common property of
the partnership shall be:
A. All the properties which belonged to each of the partners at the time of the constitution of the partnership.
B. All the properties which belonged to each of the partners after the constitution of the partnership.
C. All the properties which belonged to each of the partners at the time of the constitution of the partnership as well as the profits which they may
acquire therewith.
D. All the properties which belonged to each of the partners at the time of the constitution of the partnership as well as the profits which they may acquire
thereafter.
8. A capitalist partner engaged for his own account in an operation which is of the kind of business in which the partnership is engaged. Said partner can be
A. Compelled to sell his interest in the partnership to the other capitalist partners.
B. Compelled to dissolve or discontinue the operation of his business
C. Compelled to bring to the common funds of the partnership any profits accruing to him from his transactions.
D. Denied his share in the profits of the partnership.
9. If a partner in a partnership is insolvent, the first order of preference in the distribution of his assets are:
A. Partnership creditors
B. Partners contribution to the partnership
C. Separate creditors of the debtor
D. Pro-rata between the separate creditors of the debtor and the partnership creditor
10. A, B and C are partners in a partnership. C contributed his industry. After payments of the partnership’s obligations, only P6,000 cash remains. No other assets. In
the absence of terms to the contrary, the share of C in the remaining assets is:
A. Equal to share of A B, Equal to the share of B C. P2,000 D. Nothing
11. X, Y and Z are equal partners of Xyz Partnership. A owes the XYZ Partnership for p9,000. Z, a partner collected from A, P3,000 before X and Y received
anything. Z issued a receipt on the P3,000 as his share of what A owes. When X and Y collected from A, A was insolvent.
A. Partner Z shall share partners X and Y with the P3,000
B. Z cannot be required to share X and Y with the P3,000
C. X and Y should first exhaust all remedies to collect from A.
D. X and Y can automatically deduct from the capital contributions of Z in the partnership their respective share in the P3,000
12. A and B are partners in a real estate partnership . The partnership owns a piece of land which C desired to buy. C contacted A and inform him of his desire to buy
the land and A did not tell to B about it. A bought B out of the partnership and afterwards sold the land to C with a big profit.
A. The partnership is dissolved when A became the sole owner
B. The sale of the land to C is void because it was without the knowledge of B.
C. A is not liable to B for the latter’s share in the profits
D. A is liable to B for the latter’s share in the profits

13. A, B and C are partners in ABC Partnership. D represented himself as a partner in ABC Partnership to E, who, on the belief of such representation, extended
P50,000 credit to ABC Partnership. Assuming only B and C consented to such representation, who will be held liable to E?
A. E extended the credit to ABC Partnership, so a partnership liability exists, thus, all the partners, A, B and C are liable
B. B, C and D are partners by estoppels and thus, are liable prorate to E
C. Partners A, B and C who benefited from the credit extended by E are liable.
D. D who made the representation is liable to E
14. A and B are partners in a real estate business. A and B were approached by X who offered to buy a parcel of land owned by the partnership. Thereafter, b sold to
A, B’s share in the partnership. Then, A sold the land to X at a big profit.
A. A is liable to B for B’s share in the profits
B. The partnership is dissolved when A became the sole owner
C. A is not liable to B for the latter’s share in the profits
D. The sale of the land to X is void.
15. One of the following incidents may be a cause for involuntary dissolution of a partnership.
Which is?
A. Termination of the term of the partnership
B. Insolvency of any partner
C. Express will of any partner
D. Expulsion of any partner
16. A and B are equal partners in AB Partnership. Y presented himself as a partner in AB Partnership to Z, who relying on such representation, extended P50,000
credit to AB Partnership. Of the two (2) partners only B knew and consented to the representation of Y. Who should be held liable to Z?
A. Only Y, who presented himself as partner is liable.
B. Since the credit was extended to AB Partnership, a partnership liability was created, so the two (2) partners and Y are liable.
C. Partners A and B who benefited from the credit extended to the partnership AB Partnership shall be liable to Z.
D. B and Y are partners by estoppel and, thus, are liable to Z.
17. The following persons are disqualified to form a universal partnership. Who are the
exception?
A. Brother and sister
B. Husband and wife
C. Those guilty of adultery and concubinage
D. Those guilty of the same criminal offense, if the partnership is entered into a consideration of the same.
18. A is the capitalist partner and B the industrial partner. A is engaged personally in the same kind of business the partnership is engaged in.
A. If there are losses, the partnership will bear the losses

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 B. If there are profits, the profits will be shares by A and the partnership
C. If there are profits, A will give the profits to the partnership
D. A will be excluded from the partnership and pay damages.
19. A is the managing partner of ABC Partnership. X owes A personally and ABC Partnership P20,000 each. A collected and receive from X, P10,000 and he issued a
receipt wherein it is stated that the amount is applied against his personal credit.
A. The amount received will be applied in favor the partnership credit
B. The amount will be applied in proportion to both credits
C. The amount received will be applied in the credit of A
D. All the partners will decide as to whose favor it will apply
20. Three (3) of the following are similarities between a partnership and a corporation. Which is not?
A. The individuals composing both have little voice in the conduct of the business
B. Both have juridical personality separate and distinct from that of the individuals composing them.
C. Like a partnership, a corporation can act only through agents
D. Both are organizations composed of an aggregate of individuals
21. A, B and C are general partners in ABC Partnership. A, the managing partner engaged personally in a business that is the same as the business of the partnership
without the consent of B and C.
A. If there are profits, A will give the profits to the partnership
B. If there are losses, the partnership will bear the losses
C. If there are profits, they will be shared by partner A and the ABC Partnership
D. The profits or losses will be shared equally by A and the ABC Partnership
22. Three (3) of the following are rights of a general partner and also of a limited partner in a
limited partnership. Which is not?
A. To inspect and copy at reasonable hours the books of the partnership and have them kept at the principal place of business
B. To demand true and full information of all matters affecting the partnership and a formal account of partnership affairs
C. To have dissolution and winding up by decree of court
D. None of the above
23. The partnership is insolvent. These are preferred as regards to the partnership property.
A. Partnership creditors
B. Partners separate creditors
C. Partners with respect to their capital
D. Partners with respect to their profits
24. Bears the loss of property contributed to the partnership
A. Capitalist partner
B. Limited partner
C. None of the above
D. Partners contributing usufructory rights
25. When cash or property worth P3,000 or more is contributed as capital. The Articles of Co-Partnership shall be in a public instrument and be registered with the
Securities and Exchange commission. If the said requirements are not complied with:
A. It will render the partnership void.
B. It will not affect the liability of the partnership and the partners to third parties.
C. It will not give a legal personality to the partnership.
D. It will give the partnership a de-facto existence.
26. A, B and C are equal partners in Santos Brothers Partnership. The partnership is indebted to PC for P150,000. Partner A is indebted to SC for P20,000 PC attached
and took all the assets of the partnership amounting to P90,000. B and C are solvent while A is insolvent and all what he owns is a land valued at P15,000.
A. SC has the priority to the land of A as a separate creditor.
B. PC has priority to the land of A to cover A’s share of the P60,000 remaining liability of the partnership
C. B and C have priority to the land of A if they paid PC the 60,000 remaining liability of the partnership.
D. PC and AC shall have priority to the land o A in proportion to their claim of P60,000 and P20,000 respectively
27. A partnership is not dissolved upon the death of a:
A. General partner
B. Industrial partner
C. Limited partner
D. General limited partner
28. A and B are equal partners in AB Partnership C contacted XYZ and Co. and represented himself as partner in AB Partnership. XYZ and Co. contacted A who
confirmed that C is in fact a partner of AB Partnership XYZ and Co. extended credit to C for AB Partnership in the amount of P60,000. Who is liable to XYZ and
Co.?
A. A and C are partners by estoppels and are liable to XYZ and Co.
B. XYZ and Co. extended the credit to C for AB Partnership, so a partnership liability exists, so both partners, A and B together with C are liable.
C. The AB Partnership benefited, so it is liable
D. Only C who made the representation is liable
29. A, B and C are partners in a trucking and freight business. B and C without the knowledge of A approached X and offered to sell to X all the trucks of the
partnership at a price very much higher than their book value. Then B and C bought-out A from the partnership and thereafter X bought all the trucks with a big
profit of B and C.
A. The sale of the trucks to X is void because it is without the knowledge and consent of A.
B. B and C are not liable to A whatsoever
C. B and C are liable to A for his share in the profits in the sale.
D. When A was bought-out of the partnership, the partnership was dissolved so A has no more share in the profits in the sale.
30. When the capital (of a partnership) is P3,000 or more, it must be in a public instrument and must be recorded with the Securities and Exchange Commission
(Article 1772). A, B and C agreed to form a partnership and each contributed P10,000 as capital of the partnership. There was no compliance in the provisions of
Article 1772.
A. The partnership was not established
B. The partnership did not have juridical personality
C. The partnership was established and any partner may compel the execution of a public instrument
D. The partnership is void
31. A, as a partner contributed P30,000; B as partner, P15,000; and C as industrial partner, his services in the partnership. After payment of all liabilities and expenses,
only P18,000 remain as partnership assets.
A. A, P12,000; B, P6,000; C, None
B. A, P6,000; B, P6,000; C, P6,000
C. A, P9,000; B, P9,000; C, None
D. A, P8,000; B, P4,000; C, P6,000
32. This is the order of preference in the liquidation of a partnership:
A. 1.Outside creditors
2.Partners with respect to their capital
3.Partners with respect to their profit
4.Partners aside from capital and profit
B. 1. Partners with respect to their capital
2.Partners with respect to their profit
3.Partners aside from capital and profit
4. Outside creditors

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 C. 1. Outside creditors
2. Partners aside from capital and profit
3. Partners with respect to their capital
4.Partners with respect to their profit
D. 1. Partners aside from capital and profit
2. Outside creditors
3.Partners with respect to their capital
4.Partners with respect to their profit
33. Three (3) of the following are rights of a partners. Which one is not?
A. Right to associate another person to his share
B. Right to admit another partner
C. Right to inspect and copy partnership book
D. Right to ask dissolution of the firm at the proper time
34. The following are similarities between partnership and a corporation. Which is the exception?
A. Both have juridical personalities separate and distinct from that of the individuals composing them.
B. Like a partnership, a corporation can act only through agents
C. Both are organization of an aggregate of individuals
D. The individuals composing both have little voice in the conduct of the business.
35. In the partnership of A, B and C, A was appointed in the Articles of Co-Partnership as
managing partner. As such manager in good faith:
A. His power is revocable even without consent
B. His power can be revocable at any time even without just cause provided
C. He may execute all acts of administration despite the opposition of B and C
D. He can be removed for valid cause even without the vote of the partners owning the controlling interest
36. In the ABC Partnership, A and B contributed P20,000 each and C , his services. After
paying all the creditors of the partnership, only P18,000 in cash remains. In the absence of
terms to the contrary, the share of C is equal to:
A. P6,000
B. The share of A
C. The share of B
D. Nothing
37. X and Y established a partnership by contributing, each at P50,000. Z, a third party allowed his name to be included in the firm name of the partnership. The
partnership was insolvent and after exhausting all the remaining asset, there was left a liability to third persons the amount of P30,000. The creditors can compel:
A. Z to pay P30,000 remaining liability
B. X, Y and Z to pay P10,000 each
C. X or Y to pay P30,000 remaining liability
D. X and Y to pay P15,000 each
38. W, X, Y and Z formed a partnership. W, X and Y are general partners and contributed P50,000 each while Z, an industrial partner contributed his services only.
All the partners signed an agreement stipulating that the liability of W is limited to its contribution After all the assets of the partnership were exhausted there
remains an unpaid liability of P40,000. The creditors of the partnership can compel:
A. X and Y to pay the P40,000
B. X, Y and Z to pay the P40,000
C. W, X, Y and Z to pay P10,000 each and W and Z can demand reimbursement from X and Y.
D. X and Y to pay P40,000
39. A partner in a partnership who is not really a partner, not being a party to the partnership agreement, but is made liable as a partner for the protection of innocent
third persons is known as
A. Secret partner
B. Dormant partner
C. Nominal partner or partner by estoppel
D. Answer not given
40. A and B are capitalist partners, with C as industrial partner. A and B contributed P15,000 each to the capital of the partnership. A contractual liability of P40,000
was incurred by the partnership in favor of X. The capital assets of P30,000 shall first be exhausted thereby leaving an unsatisfied liability of P10,000. X can
recover the amount from:
A. A and B only
B. A, B and C
C. A, B and C and C can recover for reimbursement from A and B
D. Answer not given
41. A, B and C are partners engaged in a retail business. Their contribution is P20,000 each. D is admitted as a new partner with a contribution of P8,000. At the time
of his admission, the partnership has an outstanding obligation to E in the amount of P80,000. In this case:
A. D is not liable to E for this obligation
B. D is liable to E for this obligation so that amounting to P68,000 will be exhausted leaving a balance of P12,000. Only A, B and C shall be liable
jointly or pro-rata, out of their separate property.
C. D is liable to E for this obligation so that after the assets of the partnership will be exhausted, leaving a balance of P12,000, all the partners shall be
liable jointly or pro-rata, out of their separate property.
D. Answer not given.
42. A, B and C are general partners in ABC Partnership. D is a debtor to the partnership in the amount of P15,000. A received from Debtor D the sum of P5,000 and
issued a receipt identifying the amount as his share. Then D became insolvent, B and C cannot collect the
P10,000.
A. A cannot be compelled to share the P5,000 with B and C
B. B and C can charge the capital of A with their share of the P5,000
C. A can be compelled to share B and C the P5,000
D. B and C automatically sue D to collect the P10,000
43. M and O are partners of M & O Partnership. M is the managing partner. N owes M P10,000 and M & O partnership P30,000. The obligations of N are both due.
M collected from N the debt of N to M in the amount of P10,000 and issued a receipt in the name of M. To which obligation will the P10,000 be applied?
A. The whole of the P10,000 be applied to debt of N to M
B. The P10,000 be applied to debt of N to M and to the partnership
C. P5,000 each of debt of N to M and to the partnership
D. P2,500 to debt of N to M and P7,500 debt of N to the partnership
44. A, B and C are partners in D-3 Partnership. On April 29,2010, partner C died. Not knowing that C died, on May 1, 2010, A contracted a liability to D who also do
not know the death of C. The partnership debt is in the amount of P30,000, he can collect
A. P30,000 from A
B. P15,000 from A and P15,000 from B
C. P10,000 from estate of C; P10,000 from A ; P10,000 from B
D. P20,000 from A and P10,000 from B
45. This the order of preference in the liquidation of a general partnership:
A. Outside creditors; Partner as creditors; Partners capital; Partners profit
B. Partner as creditors; Outside creditors; Partners capital; Partners profit
C. Partners capital; Outside creditors; Partner as creditors; Partners profit
D. Outside creditors; Partner capital; Partners profit; Partners as creditors

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46. R, S and T are partners. T is the industrial partner who in addition to his services, he also contributed capital to the partnership. There is no stipulation as to
sharing of profits and losses. The partnership realized profits of P21,000. The share of T in the profits:
A. R and will determine T’s share I, in the profits
B. T’s share is P7,000
C. Pro-rata to his contributed capital
D. Nothing, because he is an industrial partner
47. Statement I. The arrival of the term of a partnership with a fixed term or period shall not dissolve the
partnership if the partners continue with the business of the partnership but such
partnership may be terminated anytime dependent on the will of the continuing partners.
Statement II. The general rule is that the loss of the specific thing contributed to the partnership when
only the use of the thing is contributed by the partner and such thing after its transfer to
the partnership which used the same or sometime was subsequently lost, the partnership
is not dissolved.
A. True; False B. True; True C. False; False D. False; True
48. A limited partner who takes active part in the management of the firm becomes:
A. A managing partner
B. Liable as a general partner
C. A general partner
D. A general partner and a limited partner at the same time
49. Which of the following statements is not correct?
A. A general partner in a limited partnership manages the business of the partnership but cannot perform acts of ownership without the consent
of the limited partners
B. Valid contributions of a limited partner are money and property but not services.
C. Additional limited partners may be admitted into the limited partnership with the consent of all the partners.
D. A person who is both a general partner and a limited partner is deemed a limited partner only with respect to the return of his contribution.
50. A is the managing partner of A and Company. X is indebted to A for P20,000 and to the partnership for P60,000. When both debts mature, X pays A P20,000 and
the latter issues a receipt for his personal credit. The payment for P20,000 shall be applied:
A. ¼ in favor of A and ¾ in favor of the partnership
B. To the whole debt owing to A
C. ½ in favor of A and ½ in favor of the partnership
D. To the debt owing to the partnership

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