Accounting Chapters 3-5

Front 1

The new capitalization of the new partnership which may be equal to less than or more than the total contributed capital

Back 1

Agreed capital or ac

Front 2

The investment of all the partners both old and new to the partnership it is the sum of the capital balances of the old partners and the contribution of the new partner

Back 2

Contributed capital

Front 3

This is the interest for equity of the new partner in the partnership

Back 3

Agreed capital credit of the new partner or acn

Front 4

This is the actual contribution of the new partner in the new partnership

Back 4

Actual investment of the new partner or a ip

Front 5

The transfer of capital from one partner to another in consideration of the good reputation or earning capacity of the latter it is recorded by debiting the capital of the given partner and crediting the capital of the receiving partner

Back 5

Bonus

Front 6

The interest or equity of a partner in the firm it is obtained by multiplying the ac by the fraction of the interests of the partner

Back 6

Capital credit

Front 7

The process of winding up a business which normally consists of conversion of non cash assets into cash payment of liabilities and distribution of remaining cash among the partners it is the complete termination of the partnership

Back 7

Liquidation

Front 8

Types of liquidation

Back 8

1. Lump Sum Liquidation or Liquidation by Totals 2.Liquidation by Installment

Front 9

The process of settling the business or partnership affairs, synonymous to liquidation

Back 9

Winding up

Front 10

The point in time when all partnership affairs are wounded up or ended

Back 10

Termination

Front 11

The process of converting assets into cash

Back 11

Realization

Front 12

The excess of the selling price over and above the cost or book value of the assets disposed through realization

Back 12

Gain on realization

Front 13

The excess of cost or book value over and above the selling price of the assets disposed through realization

Back 13

Loss on realization

Front 14

The excess of the partner's share of losses over and above the capital credit balances

Back 14

Capital deficiency

Front 15

A partner with a debit balance in his capital account after receiving share on the loss on realization

Back 15

Deficient partner

Front 16

The legal right of five part or all of an amount owing to a partner on a loan balance against a deficiency in his capital account resulting from the losses in the process of liquidation

Back 16

Right of offset

Front 17

The sum of a partner's capital loan balance and advances to the partnership

Back 17

Partner's interest

Front 18

It is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying of the business. It refers determination of the life of the existing partnership

Back 18

Dissolution

Front 19

An article the civil code of the philippines defining dissolution

Back 19

Article 1825 of the civil code of the philippines

Front 20

True or false

In dissolution new partnership continues the business activities of the dissolved partnership without interruption

Back 20

True

Front 21

This refers to the termination of the business activities carried on by the partnership

Back 21

Liquidation

Front 22

It is the winding up of the partnership affairs preparatory to the going out of business

Back 22

Liquidation

Front 23

True or false dissolution always results to liquidation

Back 23

False dissolution does not always result to liquidation

Front 24

True or false

Liquidation is always preceded by dissolution

Back 24

True

Front 25

Admission of a new partner in an existing partnership does not need consent of all the partners

Back 25

False a new partner or partners may be admitted in an existing partnership to the consent of all the partners

Front 26

When a new partner is admitted to the partnership by purchasing a portion or the whole interest of an old partner or partners the admission is known as investment

Back 26

False it is known as purchase

Front 27

When the purchase price of the equity being bought is equal to the book value of the equity or interest being sold

Back 27

At book value

Front 28

When the purchase price of the equity being bought is smaller than the book value of equity or interest being sold

Back 28

At less than book value

Front 29

This is the process whereby the distribution of cash to the partners is done only after all the non cash asset have been realized the total amount of gain or loss on realization is known and all liabilities have been paid

Back 29

Lump sum liquidation or liquidation by total

Front 30

This is a process whereby assets are realized on a piecemeal basis and cash is distributed to partners on a periodic basis as it becomes available even before converting all assets into cash

Back 30

Liquidation by installment