Chapter 2: Dissociation of a Partner and Partnership Termination

Question 1

When one partner’s relationship with a partnership comes to an end, but the partnership continues to do business, it is known as

Answer 1

Dissociation

Question 2

Chase, Marla, and Enrique have been operating a chain of self-service laundries as a general partnership for many years. Marla declares bankruptcy. In most states, Marla’s bankruptcy will

Answer 2

cause Marla’s dissociation from the partnership

Question 3

After a partner’s dissociation, his or her interest in the partnership must be purchased.

Answer 3

True

Question 4

How is the buyout price of a dissociated partner calculated?

Answer 4

The price is based on the amount that would have been distributed to the partner if the partnership had shutdown on the date of dissociation

Question 5

the four acts that generally cause dissolution of a partnership.

Answer 5

1. Judicial Decree
2. Death of a partner
3. Acts of the partners
4. Expiration of time period

Question 6

Any event that makes it unlawful for the partnership to continue its business will result in dissolution

Answer 6

True

Question 7

After dissolution, the partnership does not continue for even a day

Answer 7

False

Question 8

All but one of the following is included in partnership winding up activities:

Answer 8

Signing new contracts for the partnership.

Question 9

What happens when, after winding up, the partnerships liabilities are greater than its assets?

Answer 9

The partners bear the losses in the same proportion in which they shared the profits.