When Evaluating the Liquidity of a Partnership,creditors Will Likely Base

question 52

Multiple Choice

When evaluating the liquidity of a partnership,creditors will likely base their decision on:

• A)the business ability to generate a profit.
• B)previous debts of the business.
• C)the total assets owned by the business.
• D)the financial strength of the owners.

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Definitions:

Corporate Headquarters

Corporate headquarters refers to the main office or center of operations for a company, where key management and executive functions are performed.

Incorporated

The process by which a business becomes a legally recognized entity, separate from its owners, with its own rights and liabilities.

Articles of Organization

Legal documents filed with the state that formally establish the creation of a limited liability company (LLC).

Limited Liability Company

An organizational model that merges the direct tax benefits of a partnership or single ownership with the reduced legal responsibility of a corporation.