Which of the Following Is True Regarding Partnerships

question 128

Multiple Choice

Which of the following is true regarding partnerships?

• A) They are created when two or more persons agree to undertake to do business jointly for profit.
• B) Agency concepts do not apply to partners.
• C) Partners assume fiduciary duties toward one another.
• D) Partners are not personally liable for the business obligations and debts of the partnership.
• E) They are created when two or more persons agree to undertake to do business jointly for profit, and partners assume fiduciary duties toward one another.

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Definitions:

Relevant

Relates to or directly impacts the subject under discussion.

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent, insurance, and salaries.

Sunk Costs

Costs that have already been incurred and cannot be recovered.

Avoidable Costs

Expenses that can be eliminated if a particular decision is made or if a particular activity is discontinued.