A Partnership

question 26

Multiple Choice

A partnership:

• A) cannot operate in more than one state without obtaining a license to do so.
• B) is generally subject to more regulation and governmental supervision than a corporation.
• C) provides general partners with unlimited liability.
• D) involves significant formation costs.
• E) allows unlimited number of people to become partners.

Evaluate the effect of transactions on a company's current ratio.

Distinguish between transactions that affect current and total assets.

Understand the concept of dividends and their impact on retained earnings.

Identify transactions involving external exchanges.

---

Definitions:

Business Creditors

Individuals or institutions that a company owes money to due to past transactions, such as suppliers or banks.

Partnership

Association of two or more persons who operate a business as co-owners by voluntary legal agreement.

Debts

Money that is owed or due to be paid to another individual or entity.