If a Partnership Contract Provides for Interest at 10% Annually

question 2

Multiple Choice

If a partnership contract provides for interest at 10% annually on each partner's investment,the interest:

• A)Is ignored when earnings are not sufficient to pay interest.
• B)Is an allowance that can make up for unequal capital contribution.
• C)Is an expense of the business.
• D)Must be paid because the partnership contract has unlimited life.
• E)Legally becomes a liability of the general partner.

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Definitions:

Lactose Intolerant

A condition where the body cannot easily digest lactose, a type of sugar found in milk and dairy products.

Lactase

An enzyme found in the small intestine necessary for the digestion of lactose, the sugar found in milk.

Digestive System

Organ system that consists of digestive organs (stomach, intestines, etc.) and accessory organs (liver, etc.); ingests and digests food; absorbs nutrients and eliminates wastes.

Photosynthesis

A biochemical process in green plants and certain other organisms that converts light energy into chemical energy, using carbon dioxide and water to produce glucose and oxygen.