Which of the Following Statements About Limited Partnerships Is Incorrect

question 35

Multiple Choice

Which of the following statements about limited partnerships is incorrect?

• A) A limited partnership is a modified form of a general partnership.
• B) Limited partnerships are common in real estate and oil and gas exploration.
• C) A limited partnership is usually formed to raise money or to spread out the risk of a venture without forming a corporation.
• D) Both the limited partners and the general partners are responsible for the debts and obligations of the partnership.
• E) A limited partnership contains two classes of owners-general and limited partners.

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Definitions:

Basic Earnings

The amount of profit attributable to shareholders before deductions for preferred dividends, calculated on a per-share basis.

Continuing Operations

The portions of a business’s activities expected to continue for the foreseeable future, as opposed to activities that are being discontinued or phased out.

Loss

A financial term referring to the situation where expenses exceed revenues, leading to negative profit.

Stock Dividend

A distribution by a corporation to its shareholders using extra shares instead of monetary payment.