In Regards to the Rights of Partners to Share in Profits

question 11

Multiple Choice

In regards to the rights of partners to share in profits, if the partnership agreement does not establish how the partnership will distribute profits,

• A) distribution of profits is suspended until a court can allocate the proper distribution amount.
• B) partners share in profits in proportion to the amount of capital contributed to the partnership.
• C) partners share in profits in proportion to their status as senior, full, associate or junior status in the partnership.
• D) all partners have a right to a share in the profits equally.
• E) the partnership must allocate profits based only on a written agreement.

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Definitions:

Bonding Employees

A fiduciary process where employees are covered by a bond to protect the employer against losses from the acts of fraud or dishonesty by the employees.

Collusion

An unethical or illegal agreement between two or more parties to limit competition, manipulate markets, or otherwise conduct deceptive practices.

Cash Registers

Machines or devices used by businesses to manage cash transactions, track sales, and store money.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those presented on a bank statement.