Question 1

Self-dealing-although fully disclosed-is not permitted in a general partnership.

Accepted Answer

A) True 
 B)False  False

Question 2

________ refers to the right of a partner to be reimbursed for expenditures incurred on behalf of the partnership.

Accepted Answer

A) Indemnification 
B) Proliferation 
C) Lucubration 
D) Fenestration 
A) Indemnification 
B) Proliferation 
C) Lucubration 
D) Fenestration A

Question 3

Which of the following is true of the liability of an incoming partner?

Accepted Answer

A) An incoming partner is liable for the previous debts of the partnership. 
B) An incoming partner is equally liable for all existing debts of the partnership. 
C) An incoming partner is liable for the debts of the partnership only to the extent of his or her capital contribution. 
D) An incoming partner is not liable for the future debts of the partnership. 
A) An incoming partner is liable for the previous debts of the partnership. 
B) An incoming partner is equally liable for all existing debts of the partnership. 
C) An incoming partner is liable for the debts of the partnership only to the extent of his or her capital contribution. 
D) An incoming partner is not liable for the future debts of the partnership. C

Question 4

All general partners have an equal right to participate in the management of the general partnership business unless otherwise specified in the general partnership agreement.

Accepted Answer

A) True 
 B)False

Question 5

Inference of the existence of a general partnership is drawn only if profits are received as ________.

Accepted Answer

A) share in a partnership 
B) payment of wages 
C) interest owed on a loan 
D) a debt owed to a creditor 
A) share in a partnership 
B) payment of wages 
C) interest owed on a loan 
D) a debt owed to a creditor

Question 6

A sole proprietor is legally responsible for the business's contracts.

Accepted Answer

A) True 
 B)False

Question 7

The Uniform Partnership Act's definition of a general partner includes other limited partnerships.

Accepted Answer

A) True 
 B)False

Question 8

General partners owe a duty to inform their partners of all information they possess that is relevant to the affairs of the partnership.

Accepted Answer

A) True 
 B)False

Question 9

A general partnership agreement must always be in writing to be considered legal.

Accepted Answer

A) True 
 B)False

Question 10

The name selected by a general partnership cannot indicate that it is a corporation.

Accepted Answer

A) True 
 B)False

Question 11

A sole proprietor has limited personal liability.

Accepted Answer

A) True 
 B)False

Question 12

How are assets distributed after the dissolution of a general partnership?

Accepted Answer

After partnership assets have been liqui

Question 13

________ are the most common form of business organization in the United States.

Accepted Answer

A) General partnerships 
B) Sole proprietorships 
C) Limited liability companies 
D) Limited partnerships 
A) General partnerships 
B) Sole proprietorships 
C) Limited liability companies 
D) Limited partnerships

Question 14

Flow-through taxation is the federal income tax imposed on general partnerships.

Accepted Answer

A) True 
 B)False

Question 15

Jonathan Lopez wants to be his own boss and ventures into retailing fruit in the neighborhood after borrowing some money from his mother.While obtaining a license to carry out business in his city,Jonathan mentions the money he borrowed but forgets to specify what type of business undertaking his store will be.Under which of the following major forms of business is Jonathan's store listed by default?

Accepted Answer

A) a general partnership 
B) a sole proprietorship 
C) a limited partnership 
D) a limited liability corporation 
A) a general partnership 
B) a sole proprietorship 
C) a limited partnership 
D) a limited liability corporation

Question 16

Instead of suing the partnerships or other partners at law,general partners are given the right to bring a(n)________ against other partners.

Accepted Answer

A) claim for damages 
B) tort action 
C) call for action 
D) action for an accounting 
A) claim for damages 
B) tort action 
C) call for action 
D) action for an accounting

Question 17

Which of the following is true of creating a sole proprietorship?

Accepted Answer

A) No government approval is required. 
B) Federal taxation is levied upon sole proprietorship. 
C) No licenses are required to do business within a city or state. 
D) Special permission must be obtained to receive a sole proprietorship status. 
A) No government approval is required. 
B) Federal taxation is levied upon sole proprietorship. 
C) No licenses are required to do business within a city or state. 
D) Special permission must be obtained to receive a sole proprietorship status.

Question 18

A(n)________ is the obligation partners owe to use the same level of care and skill that a reasonable person in the same position would use in the same circumstances.

Accepted Answer

A) duty to perform 
B) duty of care 
C) duty to inform 
D) duty of obedience 
A) duty to perform 
B) duty of care 
C) duty to inform 
D) duty of obedience

Question 19

A(n)________ is a partnership created for a fixed duration.

Accepted Answer

A) partnership for a term 
B) partnership at will 
C) ordinary partnership 
D) limited partnership 
A) partnership for a term 
B) partnership at will 
C) ordinary partnership 
D) limited partnership

Question 20

The General Partnership Act (GPA)is a model act that codifies sole proprietorship law.

Accepted Answer

A) True 
 B)False

Exam 34: Small Business, entrepreneurship, and General Partnerships

Self-dealing-although fully disclosed-is not permitted in a general partnership.

________ refers to the right of a partner to be reimbursed for expenditures incurred on behalf of the partnership.

Which of the following is true of the liability of an incoming partner?

All general partners have an equal right to participate in the management of the general partnership business unless otherwise specified in the general partnership agreement.

Inference of the existence of a general partnership is drawn only if profits are received as ________.

A sole proprietor is legally responsible for the business's contracts.

The Uniform Partnership Act's definition of a general partner includes other limited partnerships.

General partners owe a duty to inform their partners of all information they possess that is relevant to the affairs of the partnership.

A general partnership agreement must always be in writing to be considered legal.

The name selected by a general partnership cannot indicate that it is a corporation.

A sole proprietor has limited personal liability.

How are assets distributed after the dissolution of a general partnership?

________ are the most common form of business organization in the United States.

Flow-through taxation is the federal income tax imposed on general partnerships.

Instead of suing the partnerships or other partners at law,general partners are given the right to bring a(n)________ against other partners.

Which of the following is true of creating a sole proprietorship?

A(n)________ is the obligation partners owe to use the same level of care and skill that a reasonable person in the same position would use in the same circumstances.

A(n)________ is a partnership created for a fixed duration.

The General Partnership Act (GPA)is a model act that codifies sole proprietorship law.

Legal Environment of Business and Online Commerce

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