Which of the Following Statements Best Describes Partnerships

question 22

Multiple Choice

Which of the following statements best describes partnerships?

• A)In a regular partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business.
• B)Partnerships have trouble attracting large capital due to factors such as unlimited liability, and the illiquidity of partnership interests.
• C)A slow-growth company, with little need for new capital, would be more likely to organize as a corporation than would a faster-growing company.
• D)A major disadvantage of all partnerships relative to all corporations is the fact that taxes must be paid by the partners rather than by the firm itself.

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Definitions:

Sale Price

Sale price refers to the final price at which a product or service is sold after any discounts or promotions are applied.

Interest Rate Swaps

Financial derivatives in which two parties exchange interest rate obligations on debt, often switching between fixed and variable rates.

Buyer

A person or organization that purchases products or services by paying for them.

Seller

A party that offers goods or services for sale.