Question 1

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.E) A) and B)
F) A) and C)

Question 2

Luke and Maya form Northeast Air Express, a general partnership. The essential elements of this partnership do not include

Accepted Answer

A)   ​a sharing of profits and losses.
B)   ​a joint ownership of the business.
C)   ​an equal right to management in the business.
D)   ​goodwill.E) All of the above
F) A) and C)

Question 3

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.E) A) and C)
F) All of the above

Question 4

A partner's profit from a partnership is taxed as income to the firm.

Accepted Answer

A) True 
 B)False

Question 5

A partner is not liable for honest errors in judgment in conducting partnership business.

Accepted Answer

A) True 
 B)False

Question 6

Smith & Jones, Accountants, is a limited liability partnership (LLP) . The major features of an LLP are that it limits the personal liability of the partners and

Accepted Answer

A)   ​it allows the partnership to continue as a pass-through tax entity.
B)   ​LLP statutes do not vary from state to state.
C)   ​it can only do business in the state in which it was formed.
D)   ​only a few states have enacted LLP statutes.E) A) and B)
F) All of the above

Question 7

Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as

Accepted Answer

A)   ​an aggregate of individuals.
B)   ​a person.
C)   ​an entity.
D)   ​a non-entity.E) All of the above
F) B) and D)

Question 8

A majority of the states treat a partnership as an entity for most purposes.

Accepted Answer

A) True 
 B)False

Question 9

Selections, a general partnership, operates a gift shop. Selections has five partners. Tony has a one-third interest in the partnership. Each of the other partners has a one-sixth interest. With respect to management decisions

Accepted Answer

A)   ​a majority of the partners must agree.
B)   ​Tony rules.
C)   ​the senior partner decides.
D)   ​four of the partners must agree.E) B) and C)
F) C) and D)

Question 10

Beth and Connie do business as Diamond Investments. In acting on the firm's behalf, Beth makes an honest error in overestimating the value of a particular stock purchase. To her firm, Beth is

Accepted Answer

A)   ​liable for breach of the duty of care.
B)   ​liable for breach of the duty of accounting.
C)   ​liable for breach of the duty of loyalty.
D)   ​not liable.E) B) and D)
F) A) and C)

Question 11

A partnership is a pass-through entity and a taxpaying entity.

Accepted Answer

A) True 
 B)False

Question 12

Rosa is a partner in Silver Dragon, a partnership consisting of the owners of a restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosa is

Accepted Answer

A)   ​not liable.
B)   ​only liable to the amount of her capital contribution.
C)   ​only liable in proportion to the number of partners in the firm.
D)   ​personally liable to the full extent.E) All of the above
F) C) and D)

Exam 3: All Forms of Partnerships

Smith & Jones, Accountants, is a limited liability partnership (LLP) . The major features of an LLP are that it limits the personal liability of the partners and

Correct Answer
verified

Rosa is a partner in Silver Dragon, a partnership consisting of the owners of a restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosa is

Correct Answer
verified

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

Correct Answer
verified

Selections, a general partnership, operates a gift shop. Selections has five partners. Tony has a one-third interest in the partnership. Each of the other partners has a one-sixth interest. With respect to management decisions

Correct Answer
verified

A partnership is a pass-through entity and a taxpaying entity.

Correct Answer
verified

A majority of the states treat a partnership as an entity for most purposes.

Correct Answer
verified

A partner's profit from a partnership is taxed as income to the firm.

Correct Answer
verified

Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as

Correct Answer
verified

A partner is not liable for honest errors in judgment in conducting partnership business.

Correct Answer
verified

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

Correct Answer
verified

Luke and Maya form Northeast Air Express, a general partnership. The essential elements of this partnership do not include

Correct Answer
verified

Beth and Connie do business as Diamond Investments. In acting on the firm's behalf, Beth makes an honest error in overestimating the value of a particular stock purchase. To her firm, Beth is

Correct Answer
verified

Exam 3: All Forms of Partnerships

Smith & Jones, Accountants, is a limited liability partnership (LLP) . The major features of an LLP are that it limits the personal liability of the partners and

Correct AnswerverifiedShow Answer

Rosa is a partner in Silver Dragon, a partnership consisting of the owners of a restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosa is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Selections, a general partnership, operates a gift shop. Selections has five partners. Tony has a one-third interest in the partnership. Each of the other partners has a one-sixth interest. With respect to management decisions

Correct AnswerverifiedShow Answer

A partnership is a pass-through entity and a taxpaying entity.

Correct AnswerverifiedShow Answer

A majority of the states treat a partnership as an entity for most purposes.

Correct AnswerverifiedShow Answer

A partner's profit from a partnership is taxed as income to the firm.

Correct AnswerverifiedShow Answer

Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as

Correct AnswerverifiedShow Answer

A partner is not liable for honest errors in judgment in conducting partnership business.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Luke and Maya form Northeast Air Express, a general partnership. The essential elements of this partnership do not include

Correct AnswerverifiedShow Answer

Beth and Connie do business as Diamond Investments. In acting on the firm's behalf, Beth makes an honest error in overestimating the value of a particular stock purchase. To her firm, Beth is

Correct AnswerverifiedShow Answer

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verified

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