Which of the Following Is a Difference Between Corporations and Partnerships

question 9

Multiple Choice

Which of the following is a difference between corporations and partnerships?

• A) Partnerships are subject to double taxation; corporations are not.
• B) With partnerships, ownership rights are divisible and easily transferable; this is not true for corporations.
• C) Corporate owners face limited liability; owners of partnerships do not.
• D) Corporations always have more owners than partnerships.

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Definitions:

Compounding

The process whereby interest is credited to an existing principal amount as well as to interest already paid, causing the investment to grow at an accelerating rate.

Time Value

A financial principle stating that an identical amount of money has more value if it's accessible now rather than later, thanks to its capability to earn more over time.

Money

A medium of exchange that enables people and businesses to buy goods and services; recognized by a society to have value for transactions.

Annuity Due

A series of equal payments made at the beginning of consecutive periods over a fixed length of time.