chapter 2 flashcards
A business owned by two or more individuals is called a
partnership
The only requirement for a partnership
Both partners should agree to operate a business
Types of agreements that can make a partnership valid
Written and oral
The first three parts in a balance sheet
Current assets, cash, trade and other receivable and prepaid expense
Things under trade and other receivables
Accounts receivable and Accounts for doubtful accounts
How many types of business organizations are out there
4
a business which is owned and managed by only one person
Sole or single proprietorship
An association of two or move persons who bind themselves together to do business for profit.
Partnership
A body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties.
Corporation
A people centered enterprise which are jointly owned and democratically controlled by and for their memebers to realize their common socio economic needs and aspirations.
Cooperative
A business that engages in the rendering of services to other for a fee, like the beauty parlor, law firm, dental clinic, and medical clinic
Service concern
Businesses that are into the buying and selling of goods or commodities like the grocery store, drug store and department store.
Merchandising or trading concern
Businesses that are engaged in the processing of products or the conversion of raw materials into finished goods that are then sold like the furniture factory and shoe factory.
Manufacturing Concern
A ______ is a contract in where two or more persons bind themsdelves to contribute money, property, or industry into a common fund with the intention of diving the profit among themselves.
Partnership
A written agreement is required when partnership capital is _______ or more in money or in any property.
3000
Partnership is formed through the mutual agreement of all the partners.
based on contract
no one should be forced or coereced in joining a partnership
Voluntary association
any partner may act as an agent of the partnership in conducting its affairs.
Mutual agency
a partnership may be dissolved at any time by action of the partners or by operation of law.
Limited Life
The personal assets of a general partner may be used to satisfy the claims of the creditors of the partnership, if the partnership assets are not enough to settle the liabilities to outsiders upon liquidation.
Unlimited liability
Properties contributed to the partnership are owned by the partnership.
Co-ownership of property
A partner has the right to share in partnerships profits.
Co ownership of profit
A partnership has a legal personality seperate and distinct from that of each of the partners.
Legal Entity
Partnerships are subjected to ______ of 20%
Income tax
main activity is the rendering of services
Service
main activity is the purchase or sales of goods
Merchandising or trading
main activity is the production of good
Manufacturing
one wherein all the partners are general partners who are liable for the partnership debts to the extent of their personal property after all the partnership assets have been exhausted
General
one consisting of one or more general partners and one or more limited partners
Limited
one in which the partners contribute all the property, which belong to each of them
Universal partnership of all present property
one which comprises all that the partners may acquire by their industry or work during the existence of the partnership
Universal partnership of profits
one which has for its object determinate things, their use or fruits or a specific undertaking or the exercise of a profession or vocation
Particular partnership
one for which no term is specified and is not formed for a particular underetaking or venture
Partnership at will
one in which the term or period for which the partnership is to exiswt is agreed upon
partnership with a fixed term
one who contributes capital in money or property
Capitalist
one who contributes industry, labor, skill or service
industrial
one who contributes money, property and industry
Capitalist industrial
one whose liabilitry to third persons extends to his private property
General
one whose liability to third persons is limited only to the extent of his capital contribution to the partnership
Limited
one who manages actively the business of the partnership
managing partner
one that provides capital to the partnership but generally who does not participate in the management of partnership affairs.
silent
a partner who is not really a partner, not being a party to the partnership agreement, but is made liable as a partner to safeguard and protect the rights of innocent third parties.
Nominal partner
one who takes active part in the business but whose connection with the partnership is concealed on unknown to the public.
Secret
one who does not take active part in the business and is not known to the public as a partner.
Dormant partner
one who takes active part in the management of the firm and is known to the public as a partner in the business.
Otensible partner
there will be as manay capital accounts and as many drawing accounts as there are partners.
More than one capital and drawings account
partners may advance money to the partnership in the form of loans when the businesds needs additional funds.
Partners loans
the partnership may advance money to partners other than withdrawals in the form of loans
Partner’s borrowings
partners are paid salaries
partners salaries
Interest is allowed to earn on the asset invesment of the partners
interest on investment
net profit or net loss is to be divided among the partners based on their agreements.
Division of profit and losses
