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I am a little bit confused with participle. " Only transitive verbs can use their past participle as adjectives," the sentence is what I've read on a grammar website; therefore, my problem is-- how do I know which one sould be used (present participle and past participle) ?
e.g: The guy wearing the chicken costume is my cousin.
"wearing" is a participle in this sentence and is also a transitive verb, which means it can use both present participle and past participle as adjectives. Can I switch the past participle to present participle in this sentence?
Comments  
We also used ' past participle ' for passive voice.

eg Mary was scolded by me.

And ' past participle ' can be defined as an adjective to modify the subject in this case ( Mary ).

So I can say ' a scolded Mary 'Emotion: smile.

In your example eg. ' The guy wearing the chicken costume is my cousin. ' ' Wearing ' also modifies the ' guy ' but it is not in the passive form but active voice.

To make it easy to understand, we can break up the sentence into two.

The guy wears the chicken costume.
The guy is my cousin.

So, ' The guy wearing the chicken costume is my cousin 'Emotion: smile
"Only transitive verbs can use their past participle as adjectives."

This is not true. Some intransitive verbs whose past participles serve as adjectives include:

the sunken ship
the fallen leaf
advanced students
increased activity
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AnonymousThis is not true. Some intransitive verbs whose past participles serve as adjectives include:
You're only partically correct. Out of the 4 examples you posted, only "fallen " is intransitive.

http://dictionary.reference.com/browse/sunken

http://www.merriam-webster.com/dictionary/increase

the sunken ship - can be transitive or intransitive. e.g. The ship was sunken by a torpedo .

the fallen leaf -This is the only intransitive verb on the list

increased activity - Increase can be transitive or intransitive.

advanced students - Advance can be transitive or intransitive.
grammarfreakThe ship was sunken by a torpedo .
In BrE, the ship was sunk by a torpedo.
fivejedjon grammarfreakThe ship was sunken by a torpedo .In BrE, the ship was sunk by a torpedo.
So is in American English. I used sunken to demonstrate the transitive property. I understand " sunken " is not commonly used passively.
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grammarfreakI understand " sunken " is not commonly used passively.
Never, to my knowledge.

sunken
adjective
1.having sunk or been sunk beneath the surface; submerged.
2.having settled to a lower level, as walls.
3.situated or lying on a lower level: a sunken living room.
4.hollow; depressed: sunken cheeks.

verb
5. Obsolete . a past participle of sink.