Reference no: EM13837661
1. In a _____, partners divide the profits and management responsibilities and share unlimited personal liability for the debts.
business trust
franchise
limited partnership
general partnership
2. A _____ is best described as a partnership agreement in which company members hold transferable shares while all the goods of the company are held in the names of the partners.
joint stock company
business trust
syndicate
joint venture
3. Which of the following statements is true of the right of survivorship?
A partner's share of profits and a return of capital contributed by the partner pass to the surviving partners.
The rights in specific partnership property pass to the surviving partners.
The surviving partners need not necessarily account to the deceased partner's estate for the value of that partner's interest in the specific property.
A partner's personal creditor can seize specific items of partnership property.
4. Which of the following statements is true of the right to compensation of partners in a partnership relationship?
Partners do not enter into a partnership relationship with a right to compensation for performing business activities.
When a partner dies during the term of a partnership, the surviving partners are not entitled to any compensation for services.
Partners cannot receive a salary irrespective of whether the other partners agree to pay a salary to that particular partner.
Partners do not possess the right to create salaries for any partner in a partnership agreement.
5. When a party receives a share of profits for payment from the sale of goodwill of a business or some other property, there is:
a voluntary and consensual partnership.
no partnership.
a limited partnership.
a limited liability partnership.
6. In a _____, the franchise operates under the franchisor's business name and is required to follow the franchisor's standards and methods of business operation.
chain-style business operation
media franchise
manufacturing arrangement
distributorship
7. Which of the following statements is true of a joint venture?
It must be formed by drawing up a formal agreement.
It must be an agreement between two large businesses.
It is usually terminated when all the stock has been sold.
It is automatically terminated when one of the members dies.
8. Which of the following best explains duty of care of partners to one another?
Partners must, in good faith, work for the benefit of the partnership.
Partners must disclose any material facts affecting the business.
Partners who derive benefit from the partnership without the consent of the other partners must notify them of this benefit.
Partners must perform their management functions to the best of their abilities.
9. A partnership by estoppel exists when:
a nonpartner represents himself or herself as a partner, and the third party fails to rely on this information.
an agreement addresses the date or event that signals the agreement's expiration.
the partners' names, as well as the name of the partnership, are clearly mentioned in an agreement.
a third party is aware of and consents to a misrepresentation of partnership.
10. Which of the following statements is true of the property rights of a partner?
Partners own the partnership property as tenants in property, which means they own it as a group.
Property in the name of an individual partner but purchased with partnership funds is not to be considered partnership property.
Partners can use the partnership property to pay a personal debt.
Partners can sell or use the partnership property if the purpose is outside the partnership interest.
11. Which of the following establishes the rules for partnership in the absence of an express partnership agreement?
The Consolidated Omnibus Budget Reconciliation Act
The articles of partnership
The certificate of limited partnership
The Uniform Partnership Act
12. Partners have implied authority to:
use partnership property to pay a personal debt.
sell any property without the consent of all other partners.
purchase goods necessary to perpetuate a business.
use partnership property for a purpose that is outside the partnership interest.
13. Which of the following statements is true of limited partnerships?
All the partners in a limited partnership play an active role in the management of the business.
Limited partners assume unlimited personal liability for a partnership's debts.
Limited partners pay taxes on their share of the profit in a business.
If a general partner dies, a limited partnership is typically unaffected.
14. A _____ is an investment group that comes together for the explicit purpose of financing a specific large project.
cooperative
syndicate
business trust
joint stock company
15. Which of the following statements is true about a partnership?
Partners are required to deduct business losses from their nontaxable income.
Partners are typically required to create a written agreement to establish a partnership.
Income from a business involving a partnership is taxed as individual income for each partner.
In most cases, it is considered a separate legal entity from the business involved.
16. Which of the following is excluded from a franchise agreement?
Price at which the franchisee sells the goods
Location of the franchise
Sales quotas and record-keeping requirements
Method of termination of the franchise
17. Which of the following does the Uniform Partnership Act (UPA) mean by the word "association" when using it to define a partnership?
It means that the partners share the management and profits of the business.
It means that the partnership is a consensual and voluntary relationship.
It means that the partners must operate the business for a profit.
It means that the partnership can be dissolved only when a partner dies.
18. Under the _____, partnership assets are arranged in a certain order to pay any outstanding debts.
doctrine of marshaling assets
doctrine of estoppel
doctrine of worthier title
doctrine of legal aggregate
19. _____ means a third party can choose to sue the partners separately or all partners jointly in one action if a partner commits a tort or a breach of trust.
Several liability
Joint and several liability
Joint liability
Accounting liability
20. When partners have created a _____, all the partners assume liability for one partner's professional malpractice, but only to the extent of the
partnership's assets.
limited partnership
general partnership
joint venture
limited liability partnership
21. A cell phone business is an example of a:
manufacturing arrangement.
cooperative.
chain-style business operation.
distributorship.
22. A _____ is a relationship between two or more persons or corporations created for a specific business undertaking.
business trust
syndicate
joint venture
cooperative
23. Which of the following is considered a separate legal entity?
A syndicate
A limited liability partnership
A sole proprietorship
A corporation
24. Which of the following statements is true of the liability of incoming partners?
A new partner assumes limited liability for any obligations that occurred before he or she was added.
The capital a new partner adds cannot be used to pay off debts that occurred before he or she was added.
A new partner can be held personally liable for the obligations that occurred before he or she was added.
A new partner has no liability for any obligations that occurred before he or she was added.
25. Partnership is considered a legal aggregate of the partners when:
it is sued or being sued.
partnership debts eventually become the debts of the individual partners.
it is treated as a "person" separate from the partnership with a life of its own.
the partnership is taxed as a separate being.
26. Which of the following statements is true about a limited liability company (LLC)?
It combines the tax advantages and management flexibility of a partnership with the limited liability of a corporation.
Members of an LLC must be citizens or permanent residents of the United States.
The members of a limited liability company need not report their share of the profits and losses on their personal tax returns.
It is required to allocate profits and losses in proportion to ownership interests.
27. A(n) _____ entitles a creditor to a partner's profits while the partner continues to act as a partner and engage in the partnership business.
marshaling order
attachment of earnings order
warrant of execution
charging order
28. Which of the following statements best defines a cooperative?
It is an organization formed by individuals who usually pool their resources to gain an advantage in the market.
It is a business organization governed by a group of trustees, who operate the trust for the beneficiaries.
It is an investment group that comes together for the explicit purpose of financing a specific large project.
It is a partnership agreement in which company members hold transferable shares while all the goods of the company are held
in the names of the partners.
29. Which of the following is a separate legal entity that does not involve double taxation?
A C corporation
A sole proprietorship
An S corporation
A limited corporation
30. A(n) _____ is a review and listing of all partnership assets and/or profit and lists the distribution of assets and profit to the partners.
management report
charging order
reference report
accounting