Deck 3: Partnerships

Question 1

A partnership is not required to have to be valid.

A) at least two partners
B) a written partnership agreement
C) partners who co-own the partnership busi- ness
D) the purpose of earning a profit

Answer 1

B

Question 2

Partners have authority to act on
And sole proprietorships.

Answer 2

D

Question 3

State statutes generally do not provide for the right to unless otherwise amended in the partnership agreement.

A) an equal amount of the partnership profits
B) share equally in the management of the partnership
C) access of the books and records of the part- nership
D) be compensated for all time spent on behalf of the partnership

Answer 3

D

Question 4

The can be filed by a partnership to give notice of the authority, or lack of authority, of certain partners.

A) statement of authority
B) notice of partnership authority
C) partnership articles
D) statement of agreement

Question 5

Partners are jointly liable for all debts and obli- gations of the partnership.

Question 6

Under the Uniform Partnership Act (1997), partnership property is held in a tenancy of partnership.

Question 7

Under the Uniform Partnership Act (1997), partners do not have the right to

A) an equal share in the profits of the partner- ship.
B) participate in the management of the part- nership.
C) receive a salary paid by the partnership.
D) inspect the books and records of the part- nership.

Question 8

Partners act as agents

A) for third parties when dealing with the part- nership.
B) for the partnership only when that authority is expressly given.
C) only to the extent that authority is granted in the partnership agreement.
D) of the partnership and the other partners when dealing with third parties.

Question 9

Property is considered to be partnership proper- ty if it is purchased with partnership assets.

Question 10

The theory suggests that a partnership is the totality of the persons engaged in a business, and not a separate entity.

A) aggregate
B) totality
C) agency
D) entity

Question 11

A is a type of business organization that is very similar to a partnership, but is usual- ly formed for one particular event or purpose, instead of an ongoing concern.

A) limited liability partnership
B) joint venture
C) joint partnership
D) limited venture

Question 12

The income of partnerships in the United States is

A) about the same as the income of corpora- tions.
B) greater than the income of corporations.
C) less than the income of corporations.
D) greater than the income of sole proprietor- ships.

Question 13

Advantages to doing business as a partnership include

A) partners do not need to pay income tax on their income from the partnership.
B) the partnership has "flow through" taxation.
C) the partnership is taxed as a separate entity and must pay all taxes.
D) the partnership has double taxation.

Question 14

The income or loss of the partnership is passed through the partnership to the partners without double taxation.

Question 15

Partners owe a duty of loyalty and a duty of care to the partnership and the other partners.

Question 16

Under the Uniform Partnership Act (1997), the partnership is considered to be a(n)
A) accrued

A) separate entity for some purposes, and an aggregate of its partners for other purposes. behalf of the partnership with regard to actions
In the ordinary course of business.
B) actual
C) fiduciary
D) express

Question 17

The aggregate theory applies in many sections of the Uniform Partnership Act (1914) relating to the substantive liabilities and duties of the partners.

Question 18

Unanimous consent of partners is not required to

A) dissolve the partnership.
B) amend the partnership agreement.
C) elect limited liability partnership status.
D) enter into transactions in the ordinary course of business.

Question 19

Partners are liable for the personal debts of an insolvent partner.

Question 20

A corporation can be a partner in a partnership.

Question 21

The partnership is formed when the partnership agreement is filed with the secretary of state's office.

Question 22

Partners must contribute an equal amount to the partnership.

Question 23

A partnership agreement may provide for an unequal distribution of the assets of the partner- ship to the partners upon dissolution of the partnership.

Question 24

The partnership agreement may require each partner to contribute additional capital to the partnership as needed for the continuance of the partnership business.

Question 25

The partnership agreement may specify that one partner has the right to manage the business of the partnership.

Question 26

Creditors of the partnership may look to the personal property of partners in the event that partnership assets are insufficient to cover a debt.

Question 27

Partners must pay income tax on the portion of the partnership income that is allocated to them.

Question 28

Unless otherwise specified in the partnership agreement or other written agreement, in states that follow the Uniform Partnership Act (1914), the partnership dissolves whenever one partner ceases to be a partner, for whatever reason.

Question 29

Partners may purchase insurance to cover many potential liabilities.

Question 30

A partner may designate a substitute to assume all of his or her rights in and responsibilities to a partnership.

Question 31

All partners share in the profits and losses of the partnership to some extent.