Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

Tim is a partner at Starland Properties and gives one of Starland's customer lists to Sun Realty,the firm's leading competitor.In this situation,Tim has violated:

Accepted Answer

A)  the duty to act with apparent authority. 
B)  the duty to indemnify partners. 
C)  the duty to account. 
D)  the duty to maintain confidentiality of partnership information. 
A)  the duty to act with apparent authority. 
B)  the duty to indemnify partners. 
C)  the duty to account. 
D)  the duty to maintain confidentiality of partnership information. D

Question 3

A partner's express and implied authority constitutes his or her apparent authority.

Accepted Answer

A) True 
 B)False  False

Question 4

According to the RUPA,a partner:

Accepted Answer

A)  is entitled to a salary or wages. 
B)  is entitled to compensation based upon his capital contribution. 
C)  is entitled to an equal share of the profits. 
D)  is entitled to compensation based on the amount of time he contributes to the business. 
A)  is entitled to a salary or wages. 
B)  is entitled to compensation based upon his capital contribution. 
C)  is entitled to an equal share of the profits. 
D)  is entitled to compensation based on the amount of time he contributes to the business.

Question 5

Don is a partner of the firm Shaw Associates,which offers recruitment services.Don entered into a contract with Bradman & Sons to sell the land on which the partnership business is situated for $85,000.Is this contract enforceable?

Accepted Answer

A)  Yes,because Don has apparent authority to enter into contract with Bradman & Sons. 
B)  No,because Don has only express authority not actual authority. 
C)  Yes,because Don,being a partner,has implied authority to enter into contract. 
D)  No,because Don does not have the power to convey the partnership's real property. 
A)  Yes,because Don has apparent authority to enter into contract with Bradman & Sons. 
B)  No,because Don has only express authority not actual authority. 
C)  Yes,because Don,being a partner,has implied authority to enter into contract. 
D)  No,because Don does not have the power to convey the partnership's real property.

Question 6

Helen and Casey are partners.Helen contributes capital of $20,000 to the partnership and Casey contributes $10,000.They agree that Helen will receive 60 percent of all profits and that Casey will receive 40 percent.They have not decided how to share losses.The partnership makes a loss of $7,000.What is Helen's share of the loss?

Accepted Answer

A)  $2,800 
B)  $4,200 
C)  $3,500 
D)  $5,500 
A)  $2,800 
B)  $4,200 
C)  $3,500 
D)  $5,500

Question 7

In a partnership,when a partner makes a secret profit through a business transaction,what is the remedy for such a breach?

Accepted Answer

A)  Paying the other partners additional compensation 
B)  Hiring another individual to carry out the duties of the partner 
C)  Recovering the profits of the partner's competing venture 
D)  Returning the profit made in the transaction 
A)  Paying the other partners additional compensation 
B)  Hiring another individual to carry out the duties of the partner 
C)  Recovering the profits of the partner's competing venture 
D)  Returning the profit made in the transaction

Question 8

A partner uses her own truck to pick up some partnership supplies,which she pays for with her personal check.This partner has the right to be _____ for payments made from her personal funds.

Accepted Answer

A)  indemnified 
B)  investigated 
C)  adjudicated 
D)  indentured 
A)  indemnified 
B)  investigated 
C)  adjudicated 
D)  indentured

Question 9

A partnership's liability for the torts of a partner committed within the ordinary course of partnership business or within the authority of that partner is:

Accepted Answer

A)  joint and several. 
B)  joint or several,at the option of the tort creditor. 
C)  joint only. 
D)  several only. 
A)  joint and several. 
B)  joint or several,at the option of the tort creditor. 
C)  joint only. 
D)  several only.

Question 10

The apparent authority of a partner to bind the partnership in dealing with third parties:

Accepted Answer

A)  would permit a partner to submit a claim against the partnership to arbitration. 
B)  must be derived from the express powers and purposes contained in the partnership agreement. 
C)  will be effectively limited by a formal resolution of the partners of which third parties are aware. 
D)  will be effectively limited by a formal resolution of the partners of which third parties are unaware. 
A)  would permit a partner to submit a claim against the partnership to arbitration. 
B)  must be derived from the express powers and purposes contained in the partnership agreement. 
C)  will be effectively limited by a formal resolution of the partners of which third parties are aware. 
D)  will be effectively limited by a formal resolution of the partners of which third parties are unaware.

Question 11

Under the Revised Uniform Partnership Act partners owe each other loyalty.

Accepted Answer

A) True 
 B)False

Question 12

Stella,Bob,and Chris are partners in Sole Services,a general partnership that operates a shoe store.One day Stella's ex-husband Dan comes into the store to buy shoes.Stella is still angry over the divorce.While Dan's back is turned to Stella,she stabs him with a knife,inflicting serious injuries.Dan wants to sue Stella,the partnership,and each partner.Who could be required to pay for Dan's injuries?

Accepted Answer

A)  Stella only 
B)  Stella and the partnership only 
C)  Stella and each partner 
D)  Stella,the partnership,and each partner 
A)  Stella only 
B)  Stella and the partnership only 
C)  Stella and each partner 
D)  Stella,the partnership,and each partner

Question 13

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

Accepted Answer

A)  LLP 
B)  Incorporation 
C)  International Partnership 
D)  Domestic Partnership 
A)  LLP 
B)  Incorporation 
C)  International Partnership 
D)  Domestic Partnership

Question 14

Gary and Felix are partners in a general partnership.Gary does 2/3rd of the partnership work,while Felix does 1/3rd of the work.Last year the partnership earned $300,000 in profits.Under the RUPA,how much of the $300,000 is Felix entitled to receive?

Accepted Answer

A)  $200,000 
B)  $150,000 
C)  $100,000 
D)  $250,000 
A)  $200,000 
B)  $150,000 
C)  $100,000 
D)  $250,000

Question 15

How many partners must agree to modify a partnership agreement?

Accepted Answer

A)  All partners must unanimously agree. 
B)  A majority must agree to the change. 
C)  More than one but not necessarily a majority. 
D)  Only one partner is needed to modify an agreement. 
A)  All partners must unanimously agree. 
B)  A majority must agree to the change. 
C)  More than one but not necessarily a majority. 
D)  Only one partner is needed to modify an agreement.

Question 16

Any notice given to a partner is deemed to be a notice given to the partnership firm.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

A partner may personally profit from a partnership transaction when he or she deals in good faith with the partnership.

Accepted Answer

A) True 
 B)False

Question 19

In a partnership,partners may not compete against their own partnership unless:

Accepted Answer

A)  they do not monetarily benefit from their competing venture. 
B)  they have been granted the apparent authority to do so. 
C)  they obtain consent from other partners. 
D)  they play the role of silent partners. 
A)  they do not monetarily benefit from their competing venture. 
B)  they have been granted the apparent authority to do so. 
C)  they obtain consent from other partners. 
D)  they play the role of silent partners.

Question 20

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

Accepted Answer

A)  Buying paper supplies for the partnership. 
B)  Making a contract to provide audit services. 
C)  Borrowing money to repay a partnership debt. 
D)  Hiring a secretary. 
A)  Buying paper supplies for the partnership. 
B)  Making a contract to provide audit services. 
C)  Borrowing money to repay a partnership debt. 
D)  Hiring a secretary.

Exam 38: Operation of Partnerships and Related Forms

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

Tim is a partner at Starland Properties and gives one of Starland's customer lists to Sun Realty,the firm's leading competitor.In this situation,Tim has violated:

A partner's express and implied authority constitutes his or her apparent authority.

According to the RUPA,a partner:

Don is a partner of the firm Shaw Associates,which offers recruitment services.Don entered into a contract with Bradman & Sons to sell the land on which the partnership business is situated for $85,000.Is this contract enforceable?

In a partnership,when a partner makes a secret profit through a business transaction,what is the remedy for such a breach?

A partner uses her own truck to pick up some partnership supplies,which she pays for with her personal check.This partner has the right to be _____ for payments made from her personal funds.

A partnership's liability for the torts of a partner committed within the ordinary course of partnership business or within the authority of that partner is:

The apparent authority of a partner to bind the partnership in dealing with third parties:

Under the Revised Uniform Partnership Act partners owe each other loyalty.

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

Gary and Felix are partners in a general partnership.Gary does 2/3rd of the partnership work,while Felix does 1/3rd of the work.Last year the partnership earned $300,000 in profits.Under the RUPA,how much of the $300,000 is Felix entitled to receive?

How many partners must agree to modify a partnership agreement?

Any notice given to a partner is deemed to be a notice given to the partnership firm.

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

A partner may personally profit from a partnership transaction when he or she deals in good faith with the partnership.

In a partnership,partners may not compete against their own partnership unless:

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

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinson-Patman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

Filters

Gary and Felix are partners in a general partnership.Gary does 2/3^rd of the partnership work,while Felix does 1/3^rd of the work.Last year the partnership earned $300,000 in profits.Under the RUPA,how much of the $300,000 is Felix entitled to receive?