Which of the Following Statements Is TRUE of Partnerships

question 78

Multiple Choice

Which of the following statements is TRUE of partnerships?

• A) If the partners have no partnership agreement specifying how to divide profits and losses, then they share profits and losses equally.
• B) It is legally required to share the profit and losses equally, irrespective of the partnership agreement.
• C) The stated ratio of profit sharing needs to be approved by the SEC.
• D) The profit sharing is always based on each partner's capital balances and any losses will be shared equally.

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Definitions:

Corn

A large grain plant native to the Americas, grown for its edible kernels.

Comparative Advantage Theory

The principle that countries or individuals can benefit from specializing in the production of goods they can produce most efficiently, even if they are not the most efficient producer overall.

Agricultural Goods

Products derived from agriculture, such as crops and livestock, used primarily for food, fiber, and raw materials.

Farmland

Arable land used for the purpose of agricultural crops or livestock.