Question 1

Every partner has the duty to abide by majority vote.

Accepted Answer

A) True 
 B)False  True

Question 2

In the absence of a statute to the contrary, the writing of a partnership agreement need not be in a particular form.

Accepted Answer

A) True 
 B)False  True

Question 3

If a partner acts as an agent for the partnership, the resulting contract:

Accepted Answer

A)  cannot be refuted by the other partners. 
B)  would not be enforceable by law. 
C)  would not be binding on the other partners. 
D)  can be canceled by the other partners. 
A)  cannot be refuted by the other partners. 
B)  would not be enforceable by law. 
C)  would not be binding on the other partners. 
D)  can be canceled by the other partners. A

Question 4

When a partner makes an honest mistake:

Accepted Answer

A)  both the partner and the partnership are excused from liability. 
B)  the entire firm is liable if third parties are involved. 
C)  other partners are equally liable. 
D)  the partner who made the mistake is liable if third parties are involved. 
A)  both the partner and the partnership are excused from liability. 
B)  the entire firm is liable if third parties are involved. 
C)  other partners are equally liable. 
D)  the partner who made the mistake is liable if third parties are involved.

Question 5

Which of the following best describes the articles of a partnership?

Accepted Answer

A)  It is a written agreement of partnership between all partners. 
B)  It is an unwritten agreement between the founding partners. 
C)  It is the terms of partnership as described by company law. 
D)  It is a verbal agreement to form a partnership between the primary partners. 
A)  It is a written agreement of partnership between all partners. 
B)  It is an unwritten agreement between the founding partners. 
C)  It is the terms of partnership as described by company law. 
D)  It is a verbal agreement to form a partnership between the primary partners.

Question 6

Which of the following is a duty of a partner?

Accepted Answer

A)  Duty to abide by minority vote 
B)  Duty to refrain from other partnerships 
C)  Duty to keep records 
D)  Duty to refrain from personal profits 
A)  Duty to abide by minority vote 
B)  Duty to refrain from other partnerships 
C)  Duty to keep records 
D)  Duty to refrain from personal profits

Question 7

A partnership can exist only if the parties have a written agreement.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a right of a partner?

Accepted Answer

A)  Right to inspect the books at all times 
B)  Right to deny advances to other partners 
C)  Right to deny drawings to other partners 
D)  Right to protect oneself from company losses 
A)  Right to inspect the books at all times 
B)  Right to deny advances to other partners 
C)  Right to deny drawings to other partners 
D)  Right to protect oneself from company losses

Question 9

Brian, Kirk, and Jim established a partnership firm with equal capital contributions. However, Kirk provided additional contribution in the form of a loan to the company. Which of the following is true in this scenario?

Accepted Answer

A)  Brian can withdraw capital advances from the partnership. 
B)  Jim and Brian can legally prevent Kirk from withdrawing advances from the partnership. 
C)  Kirk and Brian can legally prevent Jim from withdrawing advances from the partnership. 
D)  Jim can withdraw capital advances from the partnership. 
A)  Brian can withdraw capital advances from the partnership. 
B)  Jim and Brian can legally prevent Kirk from withdrawing advances from the partnership. 
C)  Kirk and Brian can legally prevent Jim from withdrawing advances from the partnership. 
D)  Jim can withdraw capital advances from the partnership.

Question 10

In a case of a false impression of a partnership, the law will frequently hold that the apparent partners are estopped from denying that a partnership exists.

Accepted Answer

A) True 
 B)False

Question 11

Articles of partnerships need not contain the signatures of the partners.

Accepted Answer

A) True 
 B)False

Question 12

Zen Distilleries, a tobacco wholesaler, operates in a state where individual sales are prohibited for wholesalers. However, if one of the partners sells two cartons of cigarettes to an individual, the contract is likely to be:

Accepted Answer

A)  enforceable in a court of law. 
B)  binding on the firm. 
C)  enforceable on the selling partner. 
D)  null and void. 
A)  enforceable in a court of law. 
B)  binding on the firm. 
C)  enforceable on the selling partner. 
D)  null and void.

Question 13

A partnership does not have liability for the torts committed by a partner in the course of partnership business.

Accepted Answer

A) True 
 B)False

Question 14

If a partnership agreement does not fix the ratio of sharing the profits and the losses, they are to be shared in proportion to the contribution of capital.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following should be contained in any article of partnership?

Accepted Answer

A)  Biographical details of each partner 
B)  Each partner's personal address 
C)  Amounts of withdrawals of money 
D)  Names of every partner's guarantor 
A)  Biographical details of each partner 
B)  Each partner's personal address 
C)  Amounts of withdrawals of money 
D)  Names of every partner's guarantor

Question 16

Mark and James established a partnership firm dealing with textiles. Both of them contributed equally to the partnership during establishment. However, two years later James sold his share of the firm to Mike. Which of the following is legally permissible in such a scenario?

Accepted Answer

A)  James is entitled to keep the money he received from Mike. 
B)  Mike can claim nondisclosure and reclaim the money from James. 
C)  Mark can sue Mike for buying the firm from James. 
D)  Mark can sue James and reclaim the other half. 
A)  James is entitled to keep the money he received from Mike. 
B)  Mike can claim nondisclosure and reclaim the money from James. 
C)  Mark can sue Mike for buying the firm from James. 
D)  Mark can sue James and reclaim the other half.

Question 17

By virtue of the existence of a partnership, each partner has the authority to enter into binding contracts on behalf of the partnership.

Accepted Answer

A) True 
 B)False

Question 18

Each partner has the duty to inform the other partners about matters relating to personal profits from sources other than the partnership.

Accepted Answer

A) True 
 B)False

Question 19

Explain the customary or implied authority of partners.

Accepted Answer

Each partner in an ordinary trading part

Question 20

Each partner must keep a written record of all transactions performed for the firm.

Accepted Answer

A) True 
 B)False

Exam 32: Creation and Operation of a Partnership

Every partner has the duty to abide by majority vote.

In the absence of a statute to the contrary, the writing of a partnership agreement need not be in a particular form.

If a partner acts as an agent for the partnership, the resulting contract:

When a partner makes an honest mistake:

Which of the following best describes the articles of a partnership?

Which of the following is a duty of a partner?

A partnership can exist only if the parties have a written agreement.

Which of the following is a right of a partner?

Brian, Kirk, and Jim established a partnership firm with equal capital contributions. However, Kirk provided additional contribution in the form of a loan to the company. Which of the following is true in this scenario?

In a case of a false impression of a partnership, the law will frequently hold that the apparent partners are estopped from denying that a partnership exists.

Articles of partnerships need not contain the signatures of the partners.

Zen Distilleries, a tobacco wholesaler, operates in a state where individual sales are prohibited for wholesalers. However, if one of the partners sells two cartons of cigarettes to an individual, the contract is likely to be:

A partnership does not have liability for the torts committed by a partner in the course of partnership business.

If a partnership agreement does not fix the ratio of sharing the profits and the losses, they are to be shared in proportion to the contribution of capital.

Which of the following should be contained in any article of partnership?

Mark and James established a partnership firm dealing with textiles. Both of them contributed equally to the partnership during establishment. However, two years later James sold his share of the firm to Mike. Which of the following is legally permissible in such a scenario?

By virtue of the existence of a partnership, each partner has the authority to enter into binding contracts on behalf of the partnership.

Each partner has the duty to inform the other partners about matters relating to personal profits from sources other than the partnership.

Explain the customary or implied authority of partners.

Each partner must keep a written record of all transactions performed for the firm.

Introduction to Law

Courts and Court Procedure

Business Torts and Crimes

Government Regulation of Business

Nature and Classes of Contracts

Offer and Acceptance

Capacity to Contract

Consideration

Defective Agreements

Illegal Agreements

Written Contracts

Third Parties and Contracts

Termination of Contracts

Nature of Personal Property

Special Bailments

Sales of Personal Property

Formalities of a Sale

Transfer of Title and Risk in Sales Con

Warranties, Product Liability, and Cons

Nature of Negotiable Instruments

Essentials of Negotiability

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties and Holders in Due Course

Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Labor Legislation

Introduction to Business Organization

Dissolution of a Partnership

Nature of a Corporation

Ownership of a Corporation

Management and Dissolution of a Corpora

Principles of Insurance

Types of Insurance

Security Devices

Bankruptcy

Nature of Real Property

Transfer of Real Property

Real Estate Mortgages

Landlord and Tenant

Wills, Inheritances, and Trusts

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