Which of the Following Statements About Partnerships Is Incorrect

question 40

Multiple Choice

Which of the following statements about partnerships is incorrect?

• A) Partnership assets are co-owned by partners.
• B) If a partnership is terminated, the assets do not legally revert to the original contributor.
• C) If the partnership agreement does not specify the manner in which profit is to be shared, it is distributed according to capital contributions.
• D) Each partner has a claim on assets equal to the balance in the partner's capital account.

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Definitions:

Reportable Segment

A distinguishable component of an enterprise engaging in operations from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity's chief operating decision maker.

Operating Profit

The profit earned from a firm's core business operations, excluding deductions of interest and tax, as well as any non-operational income and expenses.

Loss

A financial situation where expenses exceed revenues.

Pension Expense

The total cost recognized by an employer for an accounting period regarding the company’s pension plan, comprising service costs, interest costs, plan amendments, and other factors.