Which of the Following Is True of the Assets of a Partnership

question 74

Multiple Choice

Which of the following is true of the assets of a partnership?

• A)The partner who is more actively involved in the daily business affairs is considered to be the sole owner of the partnership's assets.
• B)Any new assets purchased by the partnership are jointly owned by each partner.
• C)When a partner contributes a particular asset to the firm,he is considered to be the sole owner of the asset.
• D)In case of liquidation of assets,the partners must be paid based on the profit sharing ratio of the partnership.

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Definitions:

Liability Account

A Liability Account represents a company's financial obligations or debts that arise during the course of business operations.

Fair Market Value

The estimated price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell.

Investments

Assets purchased with the aim of generating income or appreciating in value over time, such as stocks, bonds, or real estate.

Disclosures

These are notes in financial statements that provide additional insight into the presented figures, accounting policies, and other relevant information.