Question 1

Under partnership law, ________ have the right to manage the affairs of the limited partnership.

Accepted Answer

A)   investors
B)   sole proprietors
C)   limited partners
D)   general partnersE) A) and B)
F) A) and D)

Question 2

The creation of a limited partnership is formal and requires public disclosure.

Accepted Answer

A) True 
 B)False

Question 3

An entrepreneur is a person who forms and operates a business.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is true of the liability of an incoming partner?

Accepted Answer

A)   An incoming partner is liable for the previous debts of the partnership.
B)   An incoming partner is equally liable for all existing debts of the partnership.
C)   An incoming partner is liable for the debts of the partnership only to the extent of his or her capital contribution.
D)   An incoming partner is not liable for the future debts of the partnership.E) B) and D)
F) B) and C) C

Question 5

In a sole proprietorship, the business is considered a separate legal entity.

Accepted Answer

A) True 
 B)False  False

Question 6

Which of the following partners in a limited partnership invest capital, manage the business, and are personally liable for partnership debts?

Accepted Answer

A)   specific partners
B)   limited partners
C)   general partners
D)   sole proprietorsE) A) and D)
F) B) and C)

Question 7

Laura is an investor limited partner in a limited partnership. Two years after she becomes a limited partner, Laura thinks that the general partners are not doing a very good job managing the affairs of the limited partnership and participates in the management of the limited partnership. While she is doing so, a bank loans $1 million to the limited partnership, believing that Laura is a general partner. If the limited partnership defaults on the $1 million loan, which of the following holds well?

Accepted Answer

A)   Laura is not personally liable as she is a limited partner on paper.
B)   Laura is personally liable as the bank, in good faith, thought she is a general partner.
C)   Laura has unlimited personal liability as a limited partner.
D)   Laura's liability is restricted to the value of her capital investment in the partnership.E) A) and B)
F) B) and D) B

Question 8

Which of the following partners of a limited partnership invest capital but do not participate in management?

Accepted Answer

A)   specific partners
B)   limited partners
C)   general partners
D)   sole proprietorsE) B) and C)
F) A) and B)

Question 9

Which of the following is true of a sole proprietorship?

Accepted Answer

A)   A business operated under sole proprietorship cannot be transferred.
B)   Large businesses cannot be operated under sole proprietorship.
C)   A business operated under sole proprietorship should be owned by one or more people of the same family.
D)   Creditors can recover claims against the business from the sole proprietor's personal assets.E) A) and B)
F) C) and D)

Question 10

The earnings and losses from a sole proprietorship are reported on ________.

Accepted Answer

A)   the federal income tax filing document
B)   the business license that is renewed each year
C)   the proprietor's personal income tax filing
D)   the state income tax filing documentE) A) and C)
F) A) and B)

Question 11

Which of the following is true of general partnership?

Accepted Answer

A)   A business should make a profit in order to qualify as a general partnership.
B)   The general partners need not be the co-owners of the business.
C)   General partnerships can be either oral or implied from the conduct of the parties.
D)   Charity organizations and schools are mostly formed from general partnerships.E) A) and D)
F) B) and C)

Question 12

Which of the following must be in writing even if it is below the time stipulation of the Statute of Frauds?

Accepted Answer

A)   businesses that have more than one commercial venture
B)   partnerships authorized to deal real estate
C)   businesses that are authorized to lend money
D)   enterprises which deal with health and medicineE) None of the above
F) B) and C)

Question 13

The dissolution of a general partnership discharges the liability of an outgoing partner for existing partnership debts and obligations.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following types of liability do general partners of a limited partnership have for the debts and obligations of the limited partnership?

Accepted Answer

A)   unlimited personal liability
B)   limited capital liability
C)   liability of termination as partner
D)   limited personal liabilityE) A) and B)
F) A) and C)

Question 15

General partners are not personally liable for partnership debts beyond their capital contributions.

Accepted Answer

A) True 
 B)False

Question 16

The process of liquidating a partnership's assets and distributing the proceeds to satisfy claims against the partnership is known as winding up.

Accepted Answer

A) True 
 B)False

Question 17

Why does a sole proprietorship not pay taxes at the business level?

Accepted Answer

A)   It does not have a separate legal personality.
B)   It is a small business that is exempted from taxation.
C)   It is a not-for-profit organization.
D)   It is generally an institution with no business dealings.E) A) and B)
F) A) and D)

Question 18

Which of the following is true of creating a sole proprietorship?

Accepted Answer

A)   No state government approval is required.
B)   Federal taxation is levied upon sole proprietorship.
C)   No licenses are required to do business within a city or state.
D)   Special permission must be obtained to receive a sole proprietorship status.E) All of the above
F) C) and D)

Question 19

Which of the following is a major form of conducting a business?

Accepted Answer

A)   institution
B)   charity
C)   corporation
D)   trustE) None of the above
F) A) and B)

Question 20

Which of the following is true in the creation of a general partnership?

Accepted Answer

A)   The business name has to have the names of all the partners.
B)   The business name cannot be a fictitious name.
C)   The name selected by the partnership cannot indicate that it is a corporation.
D)   The business cannot operate under a trade name.E) A) and C)
F) All of the above

Exam 14: Small Business and General and Limited Partnerships

Under partnership law, ________ have the right to manage the affairs of the limited partnership.

Correct Answer
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The creation of a limited partnership is formal and requires public disclosure.

Correct Answer
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An entrepreneur is a person who forms and operates a business.

Correct Answer
verified

Which of the following is true of the liability of an incoming partner?

Correct Answer
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C

In a sole proprietorship, the business is considered a separate legal entity.

Correct Answer
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False

Which of the following partners in a limited partnership invest capital, manage the business, and are personally liable for partnership debts?

Correct Answer
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Correct Answer
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B

Which of the following partners of a limited partnership invest capital but do not participate in management?

Correct Answer
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Which of the following is true of a sole proprietorship?

Correct Answer
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The earnings and losses from a sole proprietorship are reported on ________.

Correct Answer
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Which of the following is true of general partnership?

Correct Answer
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Which of the following must be in writing even if it is below the time stipulation of the Statute of Frauds?

Correct Answer
verified

The dissolution of a general partnership discharges the liability of an outgoing partner for existing partnership debts and obligations.

Correct Answer
verified

Which of the following types of liability do general partners of a limited partnership have for the debts and obligations of the limited partnership?

Correct Answer
verified

General partners are not personally liable for partnership debts beyond their capital contributions.

Correct Answer
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The process of liquidating a partnership's assets and distributing the proceeds to satisfy claims against the partnership is known as winding up.

Correct Answer
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Why does a sole proprietorship not pay taxes at the business level?

Correct Answer
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Which of the following is true of creating a sole proprietorship?

Correct Answer
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Which of the following is a major form of conducting a business?

Correct Answer
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Which of the following is true in the creation of a general partnership?

Correct Answer
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Exam 14: Small Business and General and Limited Partnerships

Under partnership law, ________ have the right to manage the affairs of the limited partnership.

Correct AnswerverifiedShow Answer

The creation of a limited partnership is formal and requires public disclosure.

Correct AnswerverifiedShow Answer

An entrepreneur is a person who forms and operates a business.

Correct AnswerverifiedShow Answer

Which of the following is true of the liability of an incoming partner?

Correct AnswerverifiedC

In a sole proprietorship, the business is considered a separate legal entity.

Correct AnswerverifiedFalse

Which of the following partners in a limited partnership invest capital, manage the business, and are personally liable for partnership debts?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Which of the following partners of a limited partnership invest capital but do not participate in management?

Correct AnswerverifiedShow Answer

Which of the following is true of a sole proprietorship?

Correct AnswerverifiedShow Answer

The earnings and losses from a sole proprietorship are reported on ________.

Correct AnswerverifiedShow Answer

Which of the following is true of general partnership?

Correct AnswerverifiedShow Answer

Which of the following must be in writing even if it is below the time stipulation of the Statute of Frauds?

Correct AnswerverifiedShow Answer

The dissolution of a general partnership discharges the liability of an outgoing partner for existing partnership debts and obligations.

Correct AnswerverifiedShow Answer

Which of the following types of liability do general partners of a limited partnership have for the debts and obligations of the limited partnership?

Correct AnswerverifiedShow Answer

General partners are not personally liable for partnership debts beyond their capital contributions.

Correct AnswerverifiedShow Answer

The process of liquidating a partnership's assets and distributing the proceeds to satisfy claims against the partnership is known as winding up.

Correct AnswerverifiedShow Answer

Why does a sole proprietorship not pay taxes at the business level?

Correct AnswerverifiedShow Answer

Which of the following is true of creating a sole proprietorship?

Correct AnswerverifiedShow Answer

Which of the following is a major form of conducting a business?

Correct AnswerverifiedShow Answer

Which of the following is true in the creation of a general partnership?

Correct AnswerverifiedShow Answer

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C

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False

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B

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