Which of the Following Is True with Regard to Partnership

question 23

Multiple Choice

Which of the following is true with regard to partnership?

• A) No partnership can be formed unless the parties intended to create a partnership.
• B) Sharing gross receipts is sufficient evidence of the existence of a partnership.
• C) The terms of the Partnership Act will be implied in a partnership agreement that includes provisions on the same point.
• D) A general partner is not an agent of the firm and the other partners.
• E) A limited partnership is an arrangement in which a partner may limit liability to his capital contribution.

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Definitions:

Net Income

The ultimate profit of a firm calculated by subtracting all outgoings and taxation from the gross revenue.

FIFO

"First In, First Out," an inventory valuation method where items produced or acquired first are sold, used, or disposed of first.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made at specific intervals, and cost of goods sold is calculated at the end of an accounting period.

Ending Inventory

The worth of products ready to be sold at the closure of a financial period, determined by adding the initial inventory to purchases and subtracting the cost of goods sold.