Which of the Following Statements About Limited Partnerships Is Incorrect

question 35

Multiple Choice

Which of the following statements about limited partnerships is incorrect?

• A) A limited partnership is a modified form of a general partnership.
• B) Limited partnerships are common in real estate and oil and gas exploration.
• C) A limited partnership is usually formed to raise money or to spread out the risk of a venture without forming a corporation.
• D) Both the limited partners and the general partners are responsible for the debts and obligations of the partnership.
• E) A limited partnership contains two classes of owners-general and limited partners.

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Definitions:

Credit Risk

The possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations.

Bond Issuer

The entity, either a corporation or a government, that borrows funds by selling bonds and is obligated to pay interest on them as well as repay the principal amount at maturity.

Closed Economy

An economy that does not engage in international trade with other economies, neither importing nor exporting goods and services.

Government Deficit

The financial situation in which a government's expenditures exceed its revenues within a given fiscal period, leading to borrowing or debt accumulation.