Which of the Following Is TRUE of a Partnership

question 131

Multiple Choice

Which of the following is TRUE of a partnership?

• A) All partnership firms are public firms.
• B) Partnership firms have a limited life.
• C) The owners of the partnership have limited liabilities for the partnership's debts.
• D) The maximum loss an owner of a partnership can incur is the invested amount.

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Definitions:

Agency

A relationship where one party, the agent, is authorized to act on behalf of another, the principal, in dealings with third parties.

Necessity

The condition or situation of being required or indispensable, often invoked in legal contexts where actions are taken out of an unavoidable need.

Contract

A legally binding agreement between two or more parties.

Warranty of Authority

An assurance provided by an agent to a third party that they have the authority to act on behalf of another person or entity in a legal or business transaction.