Question 1

In a general partnership, the senior partner controls decisions on ordinary matters connected with partnership business.

Accepted Answer

A) True 
 B)False

Question 2

A sharing of profits from a business creates a presumption that a partnership exists.

Accepted Answer

A) True 
 B)False

Question 3

Fact Pattern 27-2
Kristin and Lindsey are partners in Mobile Devise, an online marketing firm.
-Refer to Fact Pattern 27-2. Lindsey dissociates from Mobile. Kristin signs a contract with Organic Olives, a food seller, apparently on Mobile's behalf. Organic Olives does not know of Lindsey's dissociation. The contract is binding on​

Accepted Answer

A)  ​Kristin, Lindsey, and Mobile. 
B)  ​Kristin only. 
C)  ​Mobile only. 
D)  ​Organic Olives only. 
A)  ​Kristin, Lindsey, and Mobile. 
B)  ​Kristin only. 
C)  ​Mobile only. 
D)  ​Organic Olives only.

Question 4

In a general partnership, the senior partner manages the partnership.

Accepted Answer

A) True 
 B)False

Question 5

A partnership is forced to terminate every time a partner dissociates from the firm.

Accepted Answer

A) True 
 B)False

Question 6

Refer to Fact Pattern 27-1. Abby and Devin are

Accepted Answer

A) not partners, because Devin does not have an ownership interest or management rights in Bowls Bistro. 
B) not partners, because the pay includes an hourly wage. 
C) not partners, because the pay includes only 10 percent of the profits. 
D) partners in a partnership. 
A) not partners, because Devin does not have an ownership interest or management rights in Bowls Bistro. 
B) not partners, because the pay includes an hourly wage. 
C) not partners, because the pay includes only 10 percent of the profits. 
D) partners in a partnership.

Question 7

Bo and Clancy decide to do business as Marketing & Promotion Services. To be a partnership, this association can result from an agreement that is

Accepted Answer

A)  ​express, but not from an agreement that is implied. 
B)  ​implied, but not from an agreement that is express. 
C)  ​oral, written, or implied by conduct. 
D)  ​written, but not from an agreement that is oral or implied. 
A)  ​express, but not from an agreement that is implied. 
B)  ​implied, but not from an agreement that is express. 
C)  ​oral, written, or implied by conduct. 
D)  ​written, but not from an agreement that is oral or implied.

Question 8

Roma and Swain are partners in Roma & Swain Attorneys, LLP, a limited liability partnership. Roma supervises their firm's associate Taylor, who negligently fails to appear in court on behalf of Umberto, a client. Liability to Umberto rests only with​

Accepted Answer

A)  ​Roma and Taylor. 
B)  ​Roma. 
C)  ​Taylor. 
D)  ​Roma and Swain. 
A)  ​Roma and Taylor. 
B)  ​Roma. 
C)  ​Taylor. 
D)  ​Roma and Swain.

Question 9

Under some circumstances a non-partner can be regarded as an agent whose acts are binding on the partnership.

Accepted Answer

A) True 
 B)False

Question 10

Dissociation normally entitles the partner to buy his or her interest from the partnership.

Accepted Answer

A) True 
 B)False

Question 11

Fact Pattern 27-3
​Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners.
-Refer to Fact Pattern 27-3. Bryn, Cornell, and Duke decide to admit Giselle as a new partner in Equity Lending. Giselle's liability for partnership debts incurred before her admission is​

Accepted Answer

A)  ​limited to her capital contribution to the firm. 
B)  limited to her personal assets. 
C)  ​nothing. 
D)  ​unlimited. 
A)  ​limited to her capital contribution to the firm. 
B)  limited to her personal assets. 
C)  ​nothing. 
D)  ​unlimited.

Question 12

Delany and Efron want to form a limited partnership to do general business bookkeeping with an emphasis on tax accounting. In most states, a limited partnership will be created when Delaney and Efron​

Accepted Answer

A)  ​file a certificate of limited partnership. 
B)  ​execute a partnership agreement. 
C)  ​accept their first client. 
D)  ​make their capital contributions. 
A)  ​file a certificate of limited partnership. 
B)  ​execute a partnership agreement. 
C)  ​accept their first client. 
D)  ​make their capital contributions.

Question 13

Orlando is a limited partner in Port of Call Exports, a limited partnership. By participating in the firm's management, Orlando is liable for its obligations​

Accepted Answer

A)  ​in proportion to the number of partners in the firm. 
B)  ​to no extent. 
C)  ​to the extent of his capital contribution to the firm. 
D)  ​to the full extent. 
A)  ​in proportion to the number of partners in the firm. 
B)  ​to no extent. 
C)  ​to the extent of his capital contribution to the firm. 
D)  ​to the full extent.

Question 14

Withdrawal from a partnership before the end of its express term constitutes a breach of the partnership agreement.

Accepted Answer

A) True 
 B)False

Question 15

A limited partnership cannot be dissolved by court decree.

Accepted Answer

A) True 
 B)False

Question 16

For two years after a partner dissociates from a continuing partnership, the partnership may be bound by the acts of the dissociated partner based on apparent authority.

Accepted Answer

A) True 
 B)False

Question 17

Narib and Olivia are limited partners in Physicians Medical Center, a limited partnership. In terms of the firm's books and information regarding partnership business, Narib and Olivia are entitled to​

Accepted Answer

A)  ​access in proportion to their participation in management of the firm. 
B)  ​access to the parts that directly relate to their capital contributions. 
C)  ​no access. 
D)  ​complete access. 
A)  ​access in proportion to their participation in management of the firm. 
B)  ​access to the parts that directly relate to their capital contributions. 
C)  ​no access. 
D)  ​complete access.

Question 18

Fact Pattern 27-3
​Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners.
-Refer to Fact Pattern 27-3. Cornell's assignment of his interest in Equity Lending to Financial Consultants Corporation results in

Accepted Answer

A)  ​nothing with respect to Cornell or Equity Lending. 
B)  ​the automatic termination of Equity Lending's legal existence. 
C)  ​Cornell's liability for all of Equity Lending's debts. 
D)  Cornell's wrongful dissociation and liability for any damages. 
A)  ​nothing with respect to Cornell or Equity Lending. 
B)  ​the automatic termination of Equity Lending's legal existence. 
C)  ​Cornell's liability for all of Equity Lending's debts. 
D)  Cornell's wrongful dissociation and liability for any damages.

Question 19

Erwin, a partner in Farm Equipment Rentals & Sales, applies for a loan with Garden Valley Bank allegedly on Farm Equipment's behalf but without the authorization of the other partners. The bank knows that Erwin is not authorized to take out the loan. Liability in the event of default will be imposed on​

Accepted Answer

A)  ​none of the choices. 
B)  ​Erwin. 
C)  ​Farm Equipment. 
D)  ​Garden Valley Bank. 
A)  ​none of the choices. 
B)  ​Erwin. 
C)  ​Farm Equipment. 
D)  ​Garden Valley Bank.

Question 20

Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike accessories, and related gear. Quisa manages the business. Unless the partnership agreement states otherwise, Quisa is​

Accepted Answer

A)  ​entitled to compensation in proportion to her effect on the business. 
B)  ​entitled to compensation in proportion to her effort. 
C)  ​entitled to compensation in proportion to her capital contribution. 
D)  ​not entitled to compensation. 
A)  ​entitled to compensation in proportion to her effect on the business. 
B)  ​entitled to compensation in proportion to her effort. 
C)  ​entitled to compensation in proportion to her capital contribution. 
D)  ​not entitled to compensation.

Exam 27: All Forms of Partnership

In a general partnership, the senior partner controls decisions on ordinary matters connected with partnership business.

A sharing of profits from a business creates a presumption that a partnership exists.

In a general partnership, the senior partner manages the partnership.

A partnership is forced to terminate every time a partner dissociates from the firm.

Refer to Fact Pattern 27-1. Abby and Devin are

Bo and Clancy decide to do business as Marketing & Promotion Services. To be a partnership, this association can result from an agreement that is

Roma and Swain are partners in Roma & Swain Attorneys, LLP, a limited liability partnership. Roma supervises their firm's associate Taylor, who negligently fails to appear in court on behalf of Umberto, a client. Liability to Umberto rests only with​

Under some circumstances a non-partner can be regarded as an agent whose acts are binding on the partnership.

Dissociation normally entitles the partner to buy his or her interest from the partnership.

Delany and Efron want to form a limited partnership to do general business bookkeeping with an emphasis on tax accounting. In most states, a limited partnership will be created when Delaney and Efron​

Orlando is a limited partner in Port of Call Exports, a limited partnership. By participating in the firm's management, Orlando is liable for its obligations​

Withdrawal from a partnership before the end of its express term constitutes a breach of the partnership agreement.

A limited partnership cannot be dissolved by court decree.

For two years after a partner dissociates from a continuing partnership, the partnership may be bound by the acts of the dissociated partner based on apparent authority.

Narib and Olivia are limited partners in Physicians Medical Center, a limited partnership. In terms of the firm's books and information regarding partnership business, Narib and Olivia are entitled to​

Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike accessories, and related gear. Quisa manages the business. Unless the partnership agreement states otherwise, Quisa is​

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Roma and Swain are partners in Roma & Swain Attorneys, LLP, a limited liability partnership. Roma supervises their firm's associate Taylor, who negligently fails to appear in court on behalf of Umberto, a client. Liability to Umberto rests only with

Delany and Efron want to form a limited partnership to do general business bookkeeping with an emphasis on tax accounting. In most states, a limited partnership will be created when Delaney and Efron

Orlando is a limited partner in Port of Call Exports, a limited partnership. By participating in the firm's management, Orlando is liable for its obligations

Narib and Olivia are limited partners in Physicians Medical Center, a limited partnership. In terms of the firm's books and information regarding partnership business, Narib and Olivia are entitled to

Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike accessories, and related gear. Quisa manages the business. Unless the partnership agreement states otherwise, Quisa is