White,Gray,and Greene Enter into a Contract to Form a Partnership,but

question 31

Multiple Choice

White,Gray,and Greene enter into a contract to form a partnership,but the contract says nothing about the sharing of profits and losses.Which of the following will take place?

• A) Profits and losses will be shared in a ratio based on the dollar amount of their capital investments.
• B) Profits will be shared equally;losses will be absorbed based on dollar amount of capital investment.
• C) Profits will be based on amount of time each partner spends working for the firm;losses will be shared equally.
• D) Profits and losses will be shared equally.

---

Definitions:

Receiving Report

A document completed by the receiving staff of a company, detailing the items received, their quantities, and condition upon delivery.

Invoice

A document issued by a seller to a buyer that outlines a transaction and includes details of goods or services provided, prices, date, and payment terms.

Accounts Receivable

Funds that customers owe to a business for products or services provided but not yet compensated for.

Liquidity

A measure of how easily assets can be converted into cash without significant loss in value.