Which of the Following Statements Regarding Partnerships Is True

question 115

Multiple Choice

Which of the following statements regarding partnerships is true?

• A) Partnerships must register with the federal government.
• B) Partnerships pay taxes to the IRS.
• C) Partners must register with the state government.
• D) Partners must abide by the separate entity concept and keep their personal assets separate from the partnership assets.

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Definitions:

Cost of Goods Sold

represents the direct costs attributable to the production of the goods sold by a company, including material, labor, and overhead costs.

Other Revenue

Income derived from activities not central to a business's primary operations.

Consolidated Income Statement

A financial document that summarizes the combined income and expenses of a parent company and its subsidiaries.

Sales

The revenue a company generates from selling goods or services.