Which of the Following Statements About the Taxation of Partnerships

question 24

Multiple Choice

Which of the following statements about the taxation of partnerships is true?

• A)Both the partnership and the individuals are taxed for any profits earned.
• B)Partnerships file tax returns but pass profits and losses on to partners who report them on their tax returns.
• C)Partnerships use corporate tax rates in filing returns.
• D)Partnerships are limited in taxes depending on number of partners.
• E)None of the above about the taxation of partnerships is true.

---

Definitions:

MRP

Marginal Revenue Product, the additional revenue generated by employing one more unit of a resource, such as labor or capital.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the physical factors of production including machinery, buildings, and land.

Labor

The body of persons engaged in physical or mental work, especially to produce goods or provide services for wages.

Wage Rate

The amount of compensation paid to an employee by an employer in exchange for work performed, typically expressed on an hourly, daily, or piecework basis.