Adams Was Approached by a Mr

question 7

Multiple Choice

Adams was approached by a Mr. McCarthy of XYZ Co., who requested that Adams pay $10,000 to extinguish a debt owed by the partnership of Adams and Jefferson. Adams denied the partnership and the liability. In asserting his claim, McCarthy cited the following facts, all of which he could prove. Which of these facts is the strongest evidence of the existence of a partnership?

• A) Adams and Jefferson co-owned property.
• B) Adams and Jefferson shared the profits from a business.
• C) Adams and Jefferson shared gross returns from a business.
• D) Adams and Jefferson worked together for a non-profit charity.
• E) Adams received a commission from Jefferson based on the sale price of the goods sold by Adams for Jefferson.

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Definitions:

Calendar Year

A one-year period that begins on January 1 and ends on December 31, used for general reporting and taxation purposes.

Jane's Capital

Jane's Capital refers to the amount of money or value of assets that Jane has invested in a business or enterprise.

Legal Practice

The profession and activities related to providing legal advice, representation, and services to clients.

Journal Entry

A record in accounting that notes a specific financial transaction in a company's general ledger.