Question 1

Describe the rights and general duties of partners in a partnership.

Accepted Answer

A partner has a right to compensation as the partner's share of profits.This is true even if one partner spends much more time than another on partnership business.A partner owes a duty of loyalty and good faith to the partnership.This means that partners have a duty to exercise reasonable care and skill in transacting business for the partnership,a duty to inform other partners of all information coming to them that may be important to the operation of the partnership,and a duty to account for any expenditure of partnership funds they make.

Question 2

The partnership is liable for torts committed by any partner of the firm while engaged in partnership business under the doctrine of _____.

Accepted Answer

A)  estoppel 
B)  respondeat superior 
C)  caveat emptor 
D)  ultra vires 
A)  estoppel 
B)  respondeat superior 
C)  caveat emptor 
D)  ultra vires B

Question 3

Zach,Khalid,and Ira form a partnership.Zach's capital contribution to the firm is $5,000,while Khalid and Ira contribute $10,000 each.The parties do not make any express agreement concerning how profits are to be divided.However,they agree to share losses as follows: Zach,40%,Khalid and Ira,30% each.During the first year of the partnership,the business makes a profit of $30,000.Given this scenario,what will be Zach's share of the profit?

Accepted Answer

A)  $5,000 
B)  $9,000 
C)  $10,000 
D)  $12,000 
A)  $5,000 
B)  $9,000 
C)  $10,000 
D)  $12,000 C

Question 4

MNO was a partnership that contracted for and performed a variety of painting jobs.Before the partnership was dissolved,MNO had entered into a contract under which MNO was supposed to paint every room in the state capitol building.At the time of the partnership dissolution,MNO had not yet performed the work called for by this contract.If the partners involved in the winding up elect to perform the contract,they _____.

Accepted Answer

A)  have the authority to enter into new contracts with subcontractors, material suppliers, and workers 
B)  have no authority to enter into new contracts 
C)  cannot assign long-term contracts to other contractors 
D)  do not have the authority to enter into new contracts with subcontractors, material suppliers, and workers and hence cannot borrow money in order to complete these contracts 
A)  have the authority to enter into new contracts with subcontractors, material suppliers, and workers 
B)  have no authority to enter into new contracts 
C)  cannot assign long-term contracts to other contractors 
D)  do not have the authority to enter into new contracts with subcontractors, material suppliers, and workers and hence cannot borrow money in order to complete these contracts

Question 5

A partnership requires that the property used in the business be owned by the partnership or in equal shares by the partners.

Accepted Answer

A) True 
 B)False

Question 6

The Revised Uniform Partnership Act (RUPA)holds that property belongs to the partnership if it was transferred to:

Accepted Answer

A)  the partners in their individual capacities. 
B)  general partners only by a transfer document that specifically names the partnership indicating that partnership exists. 
C)  any partner by a transfer document indicating the partner's status as a partner or otherwise indicating that a partnership exists. 
D)  any partner by transfer document under the charging order. 
A)  the partners in their individual capacities. 
B)  general partners only by a transfer document that specifically names the partnership indicating that partnership exists. 
C)  any partner by a transfer document indicating the partner's status as a partner or otherwise indicating that a partnership exists. 
D)  any partner by transfer document under the charging order.

Question 7

A continuing partnership becomes liable for the debts incurred by the original partnership.

Accepted Answer

A) True 
 B)False

Question 8

Define partnership and explain its key elements.

Accepted Answer

A partnership is a voluntary and consens

Question 9

A partnership is a:

Accepted Answer

A)  limited association in which parties sign a contract expressing their intent to form the partnership. 
B)  voluntary and consensual association involving two or more persons. 
C)  voluntary association formed by an express agreement. 
D)  consensual association that requires the property used in the business be owned by it. 
A)  limited association in which parties sign a contract expressing their intent to form the partnership. 
B)  voluntary and consensual association involving two or more persons. 
C)  voluntary association formed by an express agreement. 
D)  consensual association that requires the property used in the business be owned by it.

Question 10

In a partnership agreement,the partners may provide for expelling a partner,and this provision eliminates the right the expelled partner would otherwise have to insist on liquidation.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true of partnership property?

Accepted Answer

A)  The fact that property is used in the business makes it partnership property though it does not show in the account books. 
B)  Payment by the partnership of taxes or insurance on property is conclusive evidence that the property is owned by the partnership. 
C)  Any property acquired with partnership funds is partnership property even if a contrary intent is shown. 
D)  Partnership property includes all property that originally was contributed to the partnership as well as anything purchased then or later for the partnership. 
A)  The fact that property is used in the business makes it partnership property though it does not show in the account books. 
B)  Payment by the partnership of taxes or insurance on property is conclusive evidence that the property is owned by the partnership. 
C)  Any property acquired with partnership funds is partnership property even if a contrary intent is shown. 
D)  Partnership property includes all property that originally was contributed to the partnership as well as anything purchased then or later for the partnership.

Question 12

A partner's ownership of partnership property is called a partnership interest.

Accepted Answer

A) True 
 B)False

Question 13

Charlene,Derwood,and Elwyn form a partnership.They make no express agreement concerning how profits are to be divided.Of the $30,000 initial capital of the firm,Charlene and Derwood each contributed $12,000.Elwyn contributed $6,000.The partnership had a profit of $15,000 during the first year of operation of the business.Given this information,Derwood's share of the profit will be _____.

Accepted Answer

A)  $5,000 
B)  $6,000 
C)  $10,000 
D)  $12,000 
A)  $5,000 
B)  $6,000 
C)  $10,000 
D)  $12,000

Question 14

A partnership agreement:

Accepted Answer

A)  in written form is highly mandatory. 
B)  in written form is needed if it creates a partnership in excess of one year. 
C)  can be modified only after the limited partners have consented to the modification, unless the agreement states otherwise. 
D)  normally does not state the salary or drawing accounts. 
A)  in written form is highly mandatory. 
B)  in written form is needed if it creates a partnership in excess of one year. 
C)  can be modified only after the limited partners have consented to the modification, unless the agreement states otherwise. 
D)  normally does not state the salary or drawing accounts.

Question 15

Which of the following is an element of a joint venture?

Accepted Answer

A)  A measure of proprietorship of joint control of the enterprise 
B)  An express or implied agreement to carry on a continuing business 
C)  A manifestation of intent by one of the parties to be associated as a joint venture 
D)  A joint interest as reflected in the contribution of skill by at least one party to the joint venture 
A)  A measure of proprietorship of joint control of the enterprise 
B)  An express or implied agreement to carry on a continuing business 
C)  A manifestation of intent by one of the parties to be associated as a joint venture 
D)  A joint interest as reflected in the contribution of skill by at least one party to the joint venture

Question 16

The final act of winding up a dissolved partnership is the distribution of assets.

Accepted Answer

A) True 
 B)False

Question 17

Under the Revised Uniform Partnership Act (RUPA),when a partner dies,the surviving partners:

Accepted Answer

A)  cannot continue the business. 
B)  are entitled to compensation for winding up the partnership business. 
C)  must accept the deceased partner's heir as a full partner. 
D)  are relieved from personal liability on partnership debts. 
A)  cannot continue the business. 
B)  are entitled to compensation for winding up the partnership business. 
C)  must accept the deceased partner's heir as a full partner. 
D)  are relieved from personal liability on partnership debts.

Question 18

Sashes Inc.is a partnership firm dealing in the manufacture of casual clothes.Rahul,one of the partners of Sashes Inc.,thinks that they should clear the old stock during Thanksgiving.For this purpose,Rahul _____.

Accepted Answer

A)  requires unanimous agreement of all the partners 
B)  requires unanimous agreement of the general partners only 
C)  has the express authority to act 
D)  requires his decision to be ratified by any two general partners 
A)  requires unanimous agreement of all the partners 
B)  requires unanimous agreement of the general partners only 
C)  has the express authority to act 
D)  requires his decision to be ratified by any two general partners

Question 19

Partners may agree at any time that the interest of one partner shall be purchased by the partnership or by one or more of the other partners.

Accepted Answer

A) True 
 B)False

Question 20

If a partner assigns his or her partnership interest to a creditor,the creditor is entitled to:

Accepted Answer

A)  receive that partner's share of the profits. 
B)  any information about partnership interests. 
C)  look at the partnership's books. 
D)  obtain a charging order against the other partners. 
A)  receive that partner's share of the profits. 
B)  any information about partnership interests. 
C)  look at the partnership's books. 
D)  obtain a charging order against the other partners.

Exam 27: Partnerships

Describe the rights and general duties of partners in a partnership.

The partnership is liable for torts committed by any partner of the firm while engaged in partnership business under the doctrine of _____.

A partnership requires that the property used in the business be owned by the partnership or in equal shares by the partners.

The Revised Uniform Partnership Act (RUPA)holds that property belongs to the partnership if it was transferred to:

A continuing partnership becomes liable for the debts incurred by the original partnership.

Define partnership and explain its key elements.

A partnership is a:

In a partnership agreement,the partners may provide for expelling a partner,and this provision eliminates the right the expelled partner would otherwise have to insist on liquidation.

Which of the following is true of partnership property?

A partner's ownership of partnership property is called a partnership interest.

A partnership agreement:

Which of the following is an element of a joint venture?

The final act of winding up a dissolved partnership is the distribution of assets.

Under the Revised Uniform Partnership Act (RUPA),when a partner dies,the surviving partners:

Sashes Inc.is a partnership firm dealing in the manufacture of casual clothes.Rahul,one of the partners of Sashes Inc.,thinks that they should clear the old stock during Thanksgiving.For this purpose,Rahul _____.

Partners may agree at any time that the interest of one partner shall be purchased by the partnership or by one or more of the other partners.

If a partner assigns his or her partnership interest to a creditor,the creditor is entitled to:

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Introduction to Security

Security Interests in Personal Property

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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