A General Partnership Is

question 83

Multiple Choice

A general partnership is:

• A) the most basic type of business organization in which there is only one owner.
• B) a legal entity that must be chartered by the state in which it is headquartered, giving it the authority to enter into legal agreements with individuals and other corporations.
• C) a special format designed to eliminate the problem of double taxation that one might find with a C-corporation format.
• D) a business that may have several general partners and several more limited partners who do not have unlimited liability.
• E) a business composed of two or more owners who contribute the initial capital of the business and share in the profits and any losses.

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Definitions:

Declining-Balance Method

A method of accelerated depreciation where an asset loses value at a faster rate in its early years of use.

Revenue Expenditures

Expenditures that are immediately charged against revenues as an expense.

Ordinary Repairs

Expenditures to maintain the operating efficiency and productive life of the unit.

Capital Expenditures

Capital employed by a business to buy or enhance tangible assets like land, factories, or machinery to boost long-term business activities.