Kendra and Amelia Operate an Art Gallery, Owned as a Partnership

question 37

Multiple Choice

Kendra and Amelia operate an art gallery, owned as a partnership. Kendra disappeared. A few days later, Amelia learned that Kendra embezzled $75,000 of government grant money through the company. Is Amelia responsible for the $75,000?

• A) No, because the embezzlement was done by Kendra.
• B) Yes, but only if Amelia was aware of the embezzlement.
• C) Yes, because Amelia and Kendra are partners.
• D) No, because partners are not responsible for the wrongful acts of other partners.
• E) Yes, but only to the extent of Amelia's investment into the partnership.

---

Definitions:

Net Operating Income

The profit a company generates from its normal business operations, excluding extraordinary items and expenses like taxes and interest.

Break-even

The point at which total revenues equal total costs, resulting in no net profit or loss for a business.

Monthly Dollar Sales

The total revenue generated from sales in a particular month measured in dollars.

Selling Price

The amount of money a customer pays to purchase a product or service.