Arthur and Alan Decide to Open a Retail Store and Operate

question 20

Multiple Choice

Arthur and Alan decide to open a retail store and operate the business as a partnership.As they require some additional funds to get the business in operation,they ask Jayne whether she would like to invest some funds in the business and become a limited partner.Assuming that Jayne becomes and remains a limited partner,which of the following statements concerning her status is correct?

• A)She may be involved in management of the business,but to a rather limited degree.
• B)She will not be entitled to any share in the profits of the business.
• C)She will have no personal liability for partnership debts,although she may lose the amount she invested in the business.
• D)She may be considered an employee and therefore will be entitled to wages for the services she rendered to the partnership.

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Definitions:

Budgeting Technique

A budgeting technique is a method or approach used to plan and manage financial resources, forecasting income and expenditures over a set period.

Production Volume

The total quantity of goods or services produced by a company within a specific time period.

Volume-Related Measures

Metrics or indicators used to assess or track the quantity of production, sales, or services.

Allocation Basis

A criterion or method used to allocate or distribute costs among different departments, products, or activities based on certain factors or proportions.