In Which of the Following Situations Would the Persons Be

question 38

Multiple Choice

In which of the following situations would the persons be partners?

• A) Aisha and Brantley jointly own shares of the capital stock of a corporation,have a joint bank account,and have purchased real estate as tenants in common.They share the dividends on the stock,the interest on the bank account,and the net proceeds from the lease of the real estate.
• B) Aisha and Brantley buy and sell real estate continuously over a five-year period,conducting a business of trading in real estate.They do not consider themselves partners.
• C) Aisha,Brantley,and Chenille each inherit an undivided one-third interest in a restaurant and decide to sell it because the market is such that they are assured a good price.
• D) Aisha and Chenille take care of each other's children while the other is working.

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Definitions:

Net Book Value

The value of an asset as recorded on the balance sheet, calculated by subtracting accumulated depreciation or amortization from the asset's original cost.

Depreciation Expense

Distributing the expense of a physical asset over its life expectancy.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset over its useful life.

Unearned Revenue

Money received by a company for goods or services that have not yet been provided, recorded as a liability until the goods or services are delivered.