Exam 38: Operation of Partnerships and Related Forms

A partner of a partnership firm should make every effort to make decisions that are in the best interest of the firm.This is related to the concept of ________.

Sharon and Martha are general partners of the SM general partnership.Sharon,acting with authority,negotiated and signed for a $500,000 loan to SM from a bank.SM has not repaid this loan.The bank can recover its loan from:

What form of partnership prevents the partners from being personally liable for the contractual obligations of the business?

Which of the following decisions must be approved by all the partners of a partnership business that provides accounting and auditing services?

Partners of a partnership cannot turn over sole authority to one partner to run the business.

Silent partners have the duty to serve and bear the same liability for partnership debts as any other partner.

A partnership and its partners are usually liable for a partner's intentional torts.

Partners have a right to be indemnified for expenditures they make for the partnership from their personal funds.

Lloyd is a partner of an ordinary partnership firm in the business of providing tax services.While serving a client on behalf of the partnership,Lloyd's partner Janet intentionally understates the client's taxable income on a federal tax return.When the true income is reported a few years later,the client is required to pay a penalty.The client sues the partnership and its partners.Which of the following is correct?

A partner is under no duty to maintain the secrets of the business.

In small partnerships of 10 or fewer partners,the partnership agreement often requires unanimous partners' agreement for many actions,such as hiring employees and making large contracts.In small partnerships,this is an important requirement because:

Which of the following partnerships can be classified as a nontrading partnership engaged in providing services?

Partners are not liable to their partnership for losses resulting from:

In a partnership agreement,partners are not criminally liable when a partner commits a crime in the course and scope of transacting partnership business,even if they knew of the partner's criminal tendencies and placed him or her in a position in which he or she could commit a crime.

In a partnership,are partners liable for the crimes committed by another partner? Explain.

Which of the following is NOT true about the management powers of partners?

Which of the following is applied in determining the liability of a partnership and of the other partners for the torts of a partner and other partnership employees?

Which of the following is true about implied authority?

In a partnership,some classes of partners may have greater voting rights than others.

Vernon and Josh are partners of an accounting firm.They agree that only Josh has authority to make contracts to perform audits of clients,an agreement known by Mantron Company.Nonetheless,Vernon and Mantron contract for the partnership to audit Mantron's financial statements.Vernon takes the contract to Josh,who reads it and says,"OK,we can perform the audit." In this situation,Josh has ________ the contract.