Which of the Following Statements Regarding Partnerships Is Incorrect

question 73

Multiple Choice

Which of the following statements regarding partnerships is incorrect?

• A) There are no legal formalities required to form a partnership and it can be an oral agreement.
• B) Partnerships have unlimited liability not subject to the amount contributed by each partner.
• C) The partnership is subject to income tax, not the individual partners.
• D) Each partner has the authority to enter contracts on behalf of the partnership, provided the contracts relate to normal operations.

---

Definitions:

Think in Possibilities

The approach of considering various potential outcomes or solutions when faced with a situation or problem.

Adult Thoughts

Cognitive processes or reflections typically characterized by greater complexity, abstraction, or maturity, associated with the mental capacity of adults.

Creative Impulse

The innate drive or motivation within individuals to bring about new ideas, solutions, or artistic expressions.

Deductive Reasoning

The method by which a conclusion is reached through the synchronization of several generally accepted premises.