Unless Otherwise Agreed in the Articles of Partnership, Which of the Following

question 72

Multiple Choice

Unless otherwise agreed in the articles of partnership, which of the following is true regarding rights partners have in regard to their interactions with other partners?

• A) Partners have the right to participate equally in management, the right to share equally in profits, the obligation to share equally in losses, and the right to additional compensation for devoting time to the business.
• B) The right to participate in management according to the level of capital contribution, the right to share in profits according to the level of capital contribution, the obligation to share in losses according to the level of capital contribution, and the right to additional compensation for devoting time to the business.
• C) The right to participate in management according to the level of capital contribution, the right to share equally in profits, the obligation to share equally in losses, and the right to additional compensation for devoting time to the business.
• D) The right to participate equally in management, the right to share in profits according to the level of capital contribution, the obligation to share in losses according to the level of capital contribution, but no right to additional compensation for devoting time to the business.
• E) The right to participate equally in management, the right to share equally in profits, the right to share equally in losses, but no right to additional compensation for devoting time to the business.

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Definitions:

Impairment of Assets

A reduction in the recoverable value of a fixed asset or goodwill, signifying that its carrying amount exceeds its recoverable amount or market value.

Degree of Control

The extent to which an entity has the power to govern the financial and operating policies of another entity so as to benefit from its activities.

Resources Required

The necessary materials, funds, personnel, and other assets needed to carry out a project, initiative, or operation.