Test Questions Flashcards
1
Q
Partnership income
A
- Flows through to the partners who pay tax on it.
- Corporations are directly taxed and so are its shareholders. Partnership income flows directly to the partners.
2
Q
A principal will be liable on a contract between the agent and a third party when the agent acts with:
A
Actual authority.
Apparent authority.
Inherent authority.
3
Q
Apparent authority arises from certain manifestations by:
A
A principal to a third party.
4
Q
The doctrine of estoppel generally focuses on what kind of situation?
A
A situation where a person relies to her detriment on another person’s representations.
5
Q
Which of the following is most important in determining whether two or more people have formed a partnership?
A
Sharing of Profits
6
Q
Can partners leave a partnership at any time they like?
A
Yes
