Which of the Following Is True of Profits and Losses

question 68

Multiple Choice

Which of the following is true of profits and losses in a general partnership?

• A) The proportion of profit shared is equal to the general partner's initial investment.
• B) Losses are shared equally by all general partners.
• C) The general partner who proposed the idea of the business gets most profit.
• D) The proportion of investment governs only the proportion of loss shared and not profit obtained.

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Definitions:

Sarbanes-Oxley Act

A U.S. federal law established in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.

Internal Control

A process designed to ensure the reliability of financial reporting, compliance with laws and regulations, and effectiveness and efficiency of operations.

Clan Control

A method of managing and influencing behavior within organizations through shared norms, values, and beliefs rather than through formal structures.

Bureaucratic Control

A system of management that relies on a fixed set of rules and procedures within an organization to regulate behavior and decisions.