In a Limited-Liability Company,the ________

question 115

Multiple Choice

In a limited-liability company,the ________.

• A) members are personally liable to pay the company's debts
• B) business terminates at the death of a member
• C) members are liable for each other's actions
• D) members pay income tax on their share of earnings

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Definitions:

Capital Account Balance

The net amount of funds invested in a business by its owners, plus retained earnings or minus accumulated losses.

Partnership Capital

The amount of capital that is contributed by the partners in a partnership firm, representing their ownership interest and basis for sharing profits and losses.

Income-sharing Ratio

A predefined formula used to distribute profits among partners or stakeholders in proportion to their agreed-upon shares.

Bonus Method

An accounting method for handling goodwill or the excess amount paid over the book value in a transaction, often used in partnership accounts.