Which of the Following Is an Advantage of Partnerships

question 128

Multiple Choice

Which of the following is an advantage of partnerships?  

• A) They are easier to start than sole proprietorships. 
• B) Their profits are taxed at the same rate as personal income. 
• C) Their liability is limited by each partner's share of the business. 
• D) There is a greater opportunity for specialization by the owners.

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Definitions:

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout.

Legal Obligation

A duty enforced by law that requires an individual or entity to conform to specific conduct or refrain from certain actions.

Cash Dividend Declaration

An announcement by a company's board of directors to distribute profits to shareholders in the form of cash.

Liability Account

An accounting record that captures the amounts a company owes to lenders or suppliers, not yet paid but recognized as obligations.