Unit 1-Partnership

Question 1

What is a partnership?

Answer 1

A partnership is a business structure where two or more individuals share ownership and management responsibilities.

Question 2

True or False: A partnership requires a formal written agreement.

Answer 2

False: While a formal written agreement is recommended, partnerships can exist without one.

Question 3

Fill in the blank: In a general partnership, all partners share _____ and liabilities.

Answer 3

profits

Question 4

What is the main advantage of a partnership?

Answer 4

The main advantage is the pooling of resources and expertise.

Question 5

Multiple Choice: Which of the following is NOT a type of partnership? A) General Partnership B) Limited Partnership C) Sole Proprietorship D) Limited Liability Partnership

Answer 5

C) Sole Proprietorship

Question 6

What defines a limited partnership?

Answer 6

A limited partnership has at least one general partner and one limited partner, where the limited partner’s liability is restricted to their investment.

Question 7

True or False: In a limited liability partnership (LLP), partners are not personally liable for the negligence of other partners.

Answer 7

True

Question 8

What is the purpose of a partnership agreement?

Answer 8

To outline the terms, responsibilities, and profit-sharing arrangements among partners.

Question 9

Fill in the blank: Partners in a general partnership are jointly and _____ liable for the debts of the business.

Answer 9

severally

Question 10

Multiple Choice: Which of the following is a disadvantage of partnerships? A) Shared decision-making B) Unlimited liability C) Greater resources D) Flexibility in management

Answer 10

B) Unlimited liability

Question 11

What is the role of a general partner in a partnership?

Answer 11

A general partner manages the business and is personally liable for its debts.

Question 12

True or False: A partnership can be dissolved unilaterally by any partner.

Answer 12

True

Question 13

What happens to the profits in a partnership?

Answer 13

Profits are typically distributed among partners according to the terms of the partnership agreement.

Question 14

Fill in the blank: Partnerships are generally taxed as _____ entities.

Answer 14

pass-through

Question 15

What is a silent partner?

Answer 15

A silent partner is an individual who invests in the partnership but does not participate in management.

Question 16

What is a major financial disadvantage of partnerships compared to corporations?

Answer 16

Partners are personally liable for business debts, risking personal assets.

Question 17

True or False: In a partnership, all partners have equal decision-making power.

Answer 17

False

Question 18

Fill in the blank: A disadvantage of partnerships is the potential for _____ among partners.

Answer 18

conflict

Question 19

Which type of partnership can lead to limited liability for some partners?

Answer 19

Limited partnership

Question 20

What is a disadvantage of partnerships regarding profit sharing?

Answer 20

Profits must be shared among partners, which can reduce individual earnings.

Question 21

What is a major financial disadvantage of partnerships compared to corporations?

Answer 21

Partners are personally liable for business debts, risking personal assets.

Question 22

True or False: In a partnership, all partners have equal decision-making power.

Answer 22

False

Question 23

Fill in the blank: A disadvantage of partnerships is the potential for _____ among partners.

Answer 23

conflict

Question 24

Which type of partnership can lead to limited liability for some partners?

Answer 24

Limited partnership

Question 25

What is a disadvantage of partnerships regarding profit sharing?

Answer 25

Profits must be shared among partners, which can reduce individual earnings.