Which of the Following Is a Disadvantage of a Partnership

question 20

Multiple Choice

Which of the following is a disadvantage of a partnership when compared to a corporation?

• A) The partnership is more likely to have a net loss.
• B) The partnership is easier to organize.
• C) The partnership is less expensive to organize.
• D) The partnership has limited life.

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Definitions:

Liquidation Account Purpose

The objective of tracking and managing all financial transactions during a company's liquidation process to ensure fair distribution of assets to creditors and shareholders.

Contributories

Individuals or entities that are liable to contribute to the assets of a company in the event of its winding up.

Capital Amount

The total value of all assets of a company or individual, before deductions, including cash and assets that can be used to produce income.

Priority Of Payment

The order in which debts or claims from creditors are paid in the event of liquidation.