MNO Was a Partnership That Contracted for and Performed a Variety

question 24

Multiple Choice

MNO was a partnership that contracted for and performed a variety of painting jobs. Before the partnership was dissolved, MNO had entered into a contract under which MNO was supposed to paint every room in the state capitol building. At the time of the partnership dissolution, MNO had not yet performed the work called for by this contract. If the partners involved in the winding up elect to perform the contract, they _____.

• A) have the authority to enter into new contracts with subcontractors, material suppliers, and workers
• B) have no authority to enter into new contracts
• C) cannot assign long-term contracts to other contractors
• D) do not have the authority to enter into new contracts with subcontractors, material suppliers, and workers and hence cannot borrow money in order to complete these contracts

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Definitions:

Transactions

Financial activities that involve the exchange of assets, services, or liabilities between two parties.

Ledger

An accounting book or computer file for recording and totaling economic transactions measured in terms of a monetary unit and categorized by account type.

Account Titles

Names given to the accounts that reflect the types of transactions they represent, used in bookkeeping to distinguish financial records.

Journalizing

The process of recording transactions in a company's journal, detailing the financial activities and their impact on accounts.