Question :
Multiple Choice Questions
35. An unincorporated association of two or more persons : 1257546
Multiple Choice Questions
35. An unincorporated association of two or more persons to pursue a business for profit as co-owners is a:
A. Partnership.
B. Proprietorship.
C. Contractual company.
D. Mutual agency.
E. Voluntary organization.
36. Advantages of a partnership include:
A. Limited life.
B. Mutual agency.
C. Unlimited liability.
D. Co-ownership of property.
E. Voluntary association.
37. A partnership agreement:
A. Is not binding unless it is in writing.
B. Is the same as a limited liability partnership.
C. Is binding even if it is not in writing.
D. Does not generally address the issue of the rights and duties of the partners.
E. Is also called the articles of incorporation.
38. Mutual agency means
A. Creditors can apply their claims to partners’ personal assets.
B. Partners are taxed on partnership withdrawals.
C. All partners must agree before the partnership can act.
D. The partnership has a limited life.
E. A partner can commit or bind the partnership in any contract within the scope of the partnership business.
39. A partnership that has two classes of partners, general and limited, where the limited partners have no personal liability beyond the amounts they invest in the partnership, and no active role in the partnership, except as specified in the partnership agreement is a:
A. Mutual agency partnership.
B. Limited partnership.
C. Limited liability partnership.
D. General partnership.
E. Limited liability company.
40. A partnership designed to protect innocent partners from malpractice or negligence claims resulting from acts of another partner is a(n):
A. Partnership.
B. Limited partnership.
C. Limited liability partnership.
D. General partnership.
E. Unlimited liability company.
41. Mutual agency implies that each partner in a partnership is a fully authorized agent of the partnership. Which of the following statements is correct regarding the authority of a partner to bind the partnership in dealings with third parties?
A. The partner’s authority must be derived from the partnership agreement.
B. The partner’s authority may be effectively limited by a formal resolution of the other partners, even if third parties are not aware of that limitation.
C. Only a partner with a majority interest in a partnership has the authority to represent the partnership to third parties.
D. A partner has authority to deal with third parties on the behalf of the other partners only if he has written permission to do so.
E. A partner may be able to legally bind the partnership to actions even if the other partners are unaware of his actions.
42. Pat and Nicole formed Here & There as a limited liability company. Unless the member owners elect to be treated otherwise, the Internal Revenue Service will tax the LLC as:
A. An S corporation.
B. A C corporation.
C. A non-taxable entity.
D. A joint venture.
E. A partnership.
43. A partnership in which all partners have mutual agency and unlimited liability is called:
A. Limited partnership.
B. Limited liability partnership.
C. General partnership.
D. S corporation.
E. Limited liability company.
44. Carter Pearson is a partner in Event Promoters. His beginning partnership capital balance for the current year is $55,000, and his ending partnership capital balance for the current year is $62,000.His share of this year’s partnership income was $6,250. What is his partner return on equity?
A. 5.34%
B. 8.93%
C. 10.08%
D. 11.36%
E. 10.68%
