Travis Has Agreed to Invest $16,000 in a Partnership with His

question 218

Multiple Choice

Travis has agreed to invest $16,000 in a partnership with his sister and brother-in-law. He does not intend to actively work in the partnership, nor does he wish to risk any of his own assets other than the $16,000 he initially invests. The partnership has agreed to permit him to share in the profits. As an expert on forms of business ownership, you know that Travis is a ______________ in this partnership.

• A) general partner
• B) preferred stockholder
• C) secondary partner
• D) limited partner

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Definitions:

Worn-Out Machinery

Worn-Out Machinery refers to equipment that has reached the end of its useful life due to wear and tear, aging, or obsolescence.

Expanding Current Operations

The process of increasing the scale or scope of a company's business activities.

Accrued Interest

The accumulation of interest on a loan or bond since the last payment date but not yet paid out to the lender.

Gain on Sale of Investments

The profit realized from selling investments for more than the purchase price.