1. S1: Partnership profits and losses (including bonuses and revaluations) are allocated in accordance with their Profit and Loss Ratio. S2: If only the share in the profits have been established in the articles of partnership, then the share in the losses must be in accordance with their profit ratio.

a. Both are false

b. S2 True; S1 False

c. Both are true

d. S1 True; S2 False

2. Bonuses to the old partners arise under each of the following circumstances, except:

a. Agreed bonus in the distribution of partnership net income

b. Purchase of Interest by a new partner

c. Withdrawal of a partner and the interest is purchased by the partnership

d. Total contributed capital of the new partner is more than the agreed capital

3. Which of the following partnership transactions are merely transfers of equity?

a. Northwest retires from the partnership ad the partnership pays him P50,000 as full settlement of his capital balance.

b. Southeast dies and his wife receives settlement amounting to P80,000 from the partnership.

c. South withdraws from the partnership when his interest was bought out by his co-partners West and East.

d. North invests P20,000 cash for a 20% interest in the partnership. The partners agreed capital is P125,000 and the contributed capital of old partners areP105,000

4. It is a change in the partnership which is caused by a partner ceasing to be associated in the carrying of the partnership business:

a. Liquidation

b. Annulment

c.Divorce

d.Dissolution

5. If the total contributed capital of the partnership is greater than the total agreed capital, which of the following may arise:

a. Overvaluation of Assets

b. Undervaluation of Assets

c. All of the choices

d. Goodwill

Note: Please answer each number and give an explanation so that I can understand it better. Thank you!