Use the Fact Situation in Q8 to Answer the Related

question 32

Multiple Choice

Use the fact situation in Q8 to answer the related question that follows. Assume that the partnership is governed by a partnership agreement,which provides that on the retirement or bankruptcy of a partner,the partnership and firm continues.In such a case,on Albert's death,

• A)the partnership will continue,with Albert's estate replacing Albert as a partner.
• B)the partnership will continue between John,George,and Alice.
• C)the partnership will become a joint venture.
• D)the partnership will be dissolved.
• E)the partnership will continue,but the firm name must be changed.

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Definitions:

Financial Statements

Are formal records of the financial activities and position of a business, person, or other entity, providing an overview of a company's financial condition in both short and long term.

Average Collection Period

The ratio of accounts receivable to daily sales. Also called days’ receivables.

Financial Statements

Documents that report the financial activities and condition of a business or entity, including the balance sheet, income statement, and cash flow statement.

After-Tax Profit Margin

A profitability ratio calculated by dividing net income after taxes by net sales, showing what percentage of sales translates into profits after all expenses.