Advanced Accounting - Chapter 15
Which of the following statements are true of partnerships?
A partnership can obtain more equity capital than a single individual can. A partnership allows risks to be shared in rapidly growing businesses. A partnership is easy to form.
Which of the following are characteristics of partnerships?
A partnership is a separate business entity, distinct from its partners. All partners are liable jointly and severally for all obligations of the partnership unless otherwise provided by law. Each partner is an agent of the partnership for transactions carried on in the ordinary course of the partnership business.
Which of the following are features of partnerships as per the UPA 1997, Section 202?
A partnership is an association of two or more people. The partnership business is carried out for profit. The partners carry on the business as co-owners.
Which of the following is a true statement about liability in a partnership?
All partners are liable jointly and severally for all the partnership's obligations.
Which of the following are true statements regarding a partner's rights and duties?
Each partner has a right of access to the partnership's books and records. All partners are entitled to an equal share of the profits or losses unless otherwise agreed to in the partnership agreement. New partners can be admitted only with the consent of all of the partners.
True or false: Not-for-profit entities may be organized as partnerships.
False
A partnership agreement should include a complete specification of the profit or loss distribution. Which of the following are components of the profit or loss distribution?
Limits on withdrawals Salaries Interest on capital balances
Identify the components affecting the value of the capital account of a partner.
Share of the partnership profit or loss Contribution to the partnership
Which of the following statements are true regarding the items included in a partnership agreement?
The partnership agreement includes accounting methods to use. The partnership agreement includes the initial capital contribution of each partner. The partnership agreement includes procedures used for admission of new partners.
The "entity concept" means
a partnership can sue or be sued. a partnership is a separate business entity, distinct from its partners.
A partnership allows several individuals to _____ in a particular business venture.
combine their talents and skills
A partnership agreement should include:
the name of the partnership and the names of the partners. a description of the business to be conducted by the partnership. the duration of the partnership agreement.
