A Business Partner Whose Potential Financial Loss in the Partnership

question 44

Multiple Choice

A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:

• A) general partner.
• B) sole proprietor.
• C) limited partner.
• D) corporate shareholder.
• E) zero partner.

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Definitions:

Acquisition

The process by which one company takes control of another company by purchasing or exchanging equity.

Contingency Payment

A payment that depends on the occurrence of a specific condition or set of conditions in the future.

Discount Rate

The interest rate used to determine the present value of future cash flows in discounted cash flow analysis, reflecting the time value of money and risk.

Financial Balances

Financial balances refer to the comparison and calculation of financial resources, often focusing on the discrepancies between income and expenses or assets and liabilities.