Based on the Entity Concept of Partnerships, Which of the Following

question 50

Multiple Choice

Based on the entity concept of partnerships, which of the following statements is false?

• A)A partnership may enter into taxable transactions with partners.
• B)A partnership is legally liable for debts of the partners.
• C)A partnership must file an annual tax return (Form 1065) reporting the results of operations.
• D)A partnership is required to make tax elections for partnership activities that are applicable to all partners.
• E)A partnership may hold title to property in its own name.

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Definitions:

Finished Goods

Refers to products that have completed the manufacturing process but have not yet been sold or distributed to end customers.

Cost

The value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore.

Finished Goods Inventory

The stock of completed products available for sale at the end of an accounting period.

Manufacturing Company

A business entity that engages in the production of goods using labor, machines, tools, and chemical or biological processing.