Fred and Carole Were Trying to Create a List of the Pros

question 124

Multiple Choice

Fred and Carole were trying to create a list of the pros and cons of sole proprietorship, partnership, and corporation to determine the best structure for carrying on business. Which of the following is true in regards to being a general partner?

• A) A partner is liable for only the amount that he or she invested in the partnership firm.
• B) Every general partner faces limited liability for the debts of the partnership.
• C) Each partner is an agent for every other partner and of the firm itself, so a partner may be liable for the contracts made by an incompetent partner.
• D) Retiring from a partnership by giving notice to his partners frees a partner from liabilities he faced while being a partner of the firm.
• E) A partner is liable to pay from his personal assets only when the partner has committed a criminal act.

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Definitions:

Future Shop

A now-defunct Canadian electronics retailer that was absorbed by Best Buy.

Normal Retail Price

The standard selling price of a good or service in the retail market before any discounts or promotions are applied.

Computers

Electronic devices that execute specific tasks based on programmed instructions, capable of processing, storing, and retrieving data.

Break-even Price

The price level at which revenues equal costs, resulting in neither profit nor loss.