12 Interactive Quiz A

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Interactive Quiz A http://highered.mcgraw-hill.com/sites/0072996536/student_view0/chapter12/interactive_quiz_a.html[6/22/2010 6:52:12 PM] Interactive Quiz A (See related pages) Results Reporter Out of 25 questions, you answered 4 correctly with a final grade of 16% 4 correct (16%) 21 incorrect (84%) 0 unanswered (0%) Your Results: The correct answer for each question is indicated by a . 1 INCORRECT Which of the following types of businesses is most likely to not be operated as a partnership? A) A law firm B) An accounting firm C) An architectural firm D) A medical practice E) A large manufacturing firm Feedback: Partnerships are most common in small retail and service businesses. It is less likely that a large manufacturing firm would operate in the partnership form of business. 2 CORRECT John and Jerry are both lawyers. They form a law partnership. The articles of partnership specify that the firm may engage in any business that is lawful within the United States. Two weeks after the partnership is formed Jerry goes out and, without John's knowledge, buys a $20,000 farm tractor for the partnership. John refuses to allow partnership assets to be used to pay the $20,000. The business that sold the tractor to Jerry sues the partnership in court and wins the case. This situation is an application of which partnership characteristic? A) Unlimited liability B) No federal income taxation of partnerships C) Limited life D) Mutual agency E) None of the above. Feedback: As long as the public acts in good faith, any general partner can bind the partnership to a contract even if the other partners are not notified. This description is an example of the concept of mutual agency. 3 CORRECT Which two characteristics are true of partnerships? A) (1) they are subject to federal income taxation and (2) they do not have limited life B) (1) they are not subject to federal income taxation and (2) they do have unlimited life C) (1) they are not subject to federal income taxation and (2) they have limited life D) (1) they are not subject to federal income taxation and (2) they do not have limited life E) None of the above Feedback: Partnerships are not subject to federal income taxation and they do not have unlimited life. 4 INCORRECT Which two characteristics are true of partnerships? A) (1) the association between the partners is voluntary and (2) the partners have mutual agency B) (1) the association between the partners is voluntary and (2) the partners do not have mutual agency C) (1) the association between the partners is mandatory and (2) the partners have mutual agency D) (1) the association between the partners is mandatory and (2) the partners do not have mutual agency E) None of the above Feedback: The association between the partners is voluntary and (2) the partners do have mutual agency. 5
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This note was uploaded on 08/01/2010 for the course ACC 101 taught by Professor Layvand during the Spring '09 term at Thomas Edison State.

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12 Interactive Quiz A - Interactive Quiz A Home >...

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