Simon Owns a Clothing Store,Simonello

question 15

Multiple Choice

Simon owns a clothing store,Simonello.Simonello recently purchased a material amount of fabric from Simonique Inc. ,a textile company also owned by Simon.With regards to this transaction,the auditors should

• A)request a confirmation from Simonique that the transaction took place.
• B)inspect the textile received in the warehouse to ensure that the amount sent equals the amount ordered.
• C)qualify the audit report,as this puts management's integrity into question.
• D)verify that the business relationship is disclosed in the financial statements.

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Definitions:

General Partner

In a partnership, the partner who has unlimited liability for the debts of the business and takes part in the management of the business.

LLLP

stands for Limited Liability Limited Partnership, a form of partnership that combines the elements of limited partnerships and limited liability partnerships, providing limited liability to all its partners.

General Partner

A member of a partnership who has unlimited personal liability for the debts and obligations of the partnership, and who has the authority to act on behalf of the partnership in management matters.

Limited Partnership

A form of partnership consisting of at least one general partner who manages the business and is personally liable for partnership debts, and one or more limited partners who provide capital and whose liability is limited to the amount of their investment.