ABM112

Question 1

This is characterized by 2+ people binding themselves to contribute money, property, or industry with the intention of dividing profits among each other

Answer 1

Partnership

Question 2

What is the 1-10 characteristics of a partnership

Answer 2

1. Based on Contract
2. Association of Individuals
3. Ease of formation
4. Co ownership
5. Assignment of partner’s interest
6. Mutual Agency
7. Income Participation
8. Unlimited Liability
9. Limited Life
10. Consent

Question 3

This type of partner contributes money

Answer 3

Capitalist Partner

Question 4

This type of partner contributes skills

Answer 4

Industrial Partner

Question 5

This type of partner is the manager of the day to day operations and faces unlimited liability

Answer 5

General Partner

Question 6

This type of partner only contributes and can only receive profit, but in exchange they can’t manage the partnership and they have limited liability

Answer 6

Limited Partner

Question 7

What are the 4 kinds of partnerships

Answer 7

1. Based on nature
2. Based on purpose
3. Based on liability
4. Based on legality of existence

Question 8

What are the 2 types of partnership based on nature?

Answer 8

1. Trading Partnership
2. Service Rental

Question 9

What are the 2 types of partnership based on purpose?

Answer 9

1. Commercial - This one is taxable
2. General Professional - This one is not

Question 10

What are the 2 types of partnership based on Legality of Existance?

Answer 10

1. De Jure - In accordance with legal requirements, is fully legally recognized
2. De Facto - Is not fully legally recognized or registered.

Question 11

What are the 2 types of partnership based on liability?

Answer 11

1. General - All partners have limited liability, so creditors can go after anyone and everyone
2. Limited - There is a general and limited partner and limited partners only invest and are not held personally liable beyond their contribution

Question 12

This type of partner is one who is actually not a partner but
who represents himself as one.

Answer 12

Nominal Partner/Partner by Estoppel

Question 13

This type of partner is one who does not take active part in the business of the partnership and is not known as a partner

Answer 13

Dormant partner

Question 14

This type of partner is one who does not take active part in the business of the partnership though may be known as a partner

Answer 14

Silent Partner

Question 15

This type of partner is one who takes active part in the business but is not known to be a partner by outside parties.

Answer 15

Secret partner.

Question 16

Partners may invest cash or non-cash assets in the partnership. When a partner invests cash or non-cash assets, they are to be recorded at what values?

Answer 16

Values agreed upon, but if they cannot agree, then use the fair values of the non cash asset

Question 16

This type of partner is one who is designated to round up or settle the affairs of the partnership after dissolution.

Answer 16

Liquidating Partner

Question 17

A partnership may be constituted orally or in writing. In the latter case, partnership agreements are embodied in the?

Answer 17

Articles of Partnership

Question 18

This is the estimated amount that a willing seller would receive from a financially capable buyer for the sale of the asset in a free market.

Answer 18

Fair Market Value

Question 19

Assets is = to?

Answer 19

Assets = Liabilities + Owner Equity

Question 20

If an Industrial Partner only contributes skills, then how will their contributions be recorded?

Answer 20

Their contributions are put in the memorandum entry