The Essential Elements of a Partnership Do Not Include

question 10

Multiple Choice

The essential elements of a partnership do not include

• A)a sharing of profits and losses.
• B)a joint ownership of the business.
• C)an equal right in the management of the business.
• D)an intent to act in good faith.

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Definitions:

Cash Discounts

An incentive offered by sellers to buyers for early payment of invoices, aimed at encouraging prompt payment and improving cash flow.

Short-term Financial Policy

Pertains to strategies and decisions related to managing a company’s current assets and liabilities to ensure liquidity.

Flexible Short-term Policy

A financial strategy that allows for maintaining a higher level of current assets, providing a buffer against unforeseen liabilities or expenses.

Restrictive Short-term Policy

A financial policy aimed at minimizing the amount of working capital to reduce short-term financing costs, often at the risk of running low on liquidity.