The Relation of the Parties Taking Part in a Limited

question 405

Multiple Choice

The relation of the parties taking part in a limited liability company are:

• A) there are two or more members
• B) members have unlimited liability for business debts
• C) the parties have a membership interest in the business
• D) there are two or more members and the parties have a membership interest in the business
• E) there are two or more members, members have unlimited liability for business debts, and the parties have a membership interest in the business

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Definitions:

Uncollectible Accounts

Receivables that are deemed uncollectible and are written off as a loss due to the inability to collect the funds.

Allowance Account

An account used to offset the gross accounts receivable by the amount estimated to be uncollectible.

Accounts Receivable

Unsettled payments from customers to a business for goods delivered or services carried out.

Note Receivable

A financial asset representing a promise for future receipt of cash, typically arising from sales or loans, evidenced by a written promise to pay.