In the Context of Legal Forms of Business, Identify a True

question 11

Multiple Choice

In the context of legal forms of business, identify a true statement about limited liability partnership (LLP) .

• A)All partners in a limited liability partnership are jointly responsible for any debts or judgments against the firm.
• B)In a limited liability partnership, limited partners can work at the firm but not be active in its management.
• C)Limited partners in a limited liability partnership must be external advisors who do not have a stake in the ownership of the firm.
• D)General partners in a limited liability partnership are indirectly responsible for federal taxes owed by the firm.

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Definitions:

Statement of Cash Flows

A financial statement that summarizes the cash inflows and outflows for a company over a period, showing how changes in balance sheet and income affect cash and cash equivalents.

Financing Activity

Activities that result in changes in the size and composition of the equity and borrowings of a company.

Operating Activity

Business actions that are directly related to the production and delivery of goods and services, which are reflected in the income statement.

Investing Activity

This refers to transactions involving the acquisition and disposal of long-term assets and other investments not included in cash equivalents.