Which of the Following Is Not a Characteristic of a Partnership

question 9

Multiple Choice

Which of the following is not a characteristic of a partnership?

• A) The partnership itself pays no income taxes.
• B) It is easy to form a partnership.
• C) Any partner can be held personally liable for all debts of the business.
• D) A partnership requires written Articles of Partnership.
• E) Each partner has the power to obligate the partnership for liabilities.

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Definitions:

Break-Even Point

The point at which total costs equal total revenues, meaning the business is not making a profit or a loss.

Direct Material

Raw materials that can be physically and directly associated with the finished product during the manufacturing process.

Indirect Material

Materials used in the production process but not directly traceable to a finished product, such as lubricants for machinery.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.