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Partnerships as a Business Entity Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. What type of partnership has a general partner who has full liability and a limited partner whose liability is limited to their investment in the partnership?

Question 2 2. Which of the following is the best explanation of the main difference or differences between a limited partner and a general partner?

Question 3 3. Which one of the following is the partnership document that governs the rights and responsibilities of the partners?

Question 4 4. Catherine and Carl have a car washing business. They are general partners. When washing Collin's car, Carl accidentally causes severe water damage to the car's interior. Catherine wasn't there when it happened, and isn't in charge of washing the cars. Who can be held liable for the damage to Collin's car?

Question 5 5. All of the following are disadvantages of a general partnership EXCEPT _____.

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Question 6 6. Which of the following is NOT considered to be an advantage of a general partnership?

Question 7 7. A limited liability partnership is where:

Question 8 8. The main difference between a general partnership and a limited liability partnership is:

Question 9 9. Ernie and Ellis are partners in an engineering firm. They have a limited liability partnership. Each invested $20,000 to start the firm. Ernie recently gave bad advice that resulted in a large office building being built on a known land fault. The engineering firm was sued and now has to pay a $1,000,000 court judgment. Ellis can be held personally liable for:

Question 10 10. A partnership agreement is:

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Question 11 11. Partnerships are a popular type of business because:

Question 12 12. Jack and Jill form a partnership in order to build a well. The partnership agreement defines the term of the partnership as six months or until the well is complete, whichever comes first. The well is complete after just four months. Jack and Jill go their separate ways. This is known as:

Question 13 13. Jerry and Jenny are partners in a real estate investment group. Jerry invests $500,000 of his own money to acquire properties. Jenny is in charge of making the real estate transactions. However, Jerry makes a transaction on behalf of the group. Jerry's transaction is a bad deal and results in the group owing $800,000. Jerry can be held personally liable for:

Question 14 14. Jerry and Jenny are partners in a real estate investment group. Jerry invests $500,000 of his own money to acquire properties. Jenny handles the real estate transactions. Jenny makes some bad deals and now the group owes $800,000 in delinquent mortgage payments. Jerry can be held personally liable for:

Question 15 15. Jerry and Jenny are partners in a real estate investment group. Jerry invests $500,000 of his own money to acquire properties. Jenny handles the real estate transactions. Jenny makes some bad deals and now the group owes $800,000 in delinquent mortgage payments. Jenny can be held personally liable for:

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Question 16 16. Once all steps to ending a partnership are complete the partnership is considered to be void, or:

Question 17 17. Which of the following is NOT typically a process included in properly ending a partnership?

Question 18 18. The first step in ending a partnership is known as:

Question 19 19. Hannah, Liz, and Stacey started a limited liability company, an online jewelry business that really took off. In its first year, The Triple Bedazzle company brought in $60,000 in profits. Since the three women had previously decided to split the profits equally, they each made an income of $20,000. How will The Triple Bedazzle company's income tax be handled on its $60,000 profit?

Question 20 20. Hannah, Liz, and Stacey started a limited liability company, an online jewelry business. Although they felt they did their research, the business did not take off due to intense competition from more experienced online jewelry boutiques. The three women felt they had no choice but to close the shop. At the time of the closing, they owed their creditors $25,000 for which they were being sued. How much money can the creditors seek in payment from either The Triple Bedazzle, the three women, or both?

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Question 21 21. A limited liability company is a hybrid of which two business structures?

Question 22 22. Betty and Bert start a bicycle repair business. Betty runs the shop and Bert fixes the bikes. Bert repairs Bea's bike, but he forgets to tighten the bolts on her seat. Bea falls off the bike and is injured. She sues the bike shop and is awarded a money judgment. Which of the following is true?

Question 23 23. Betty and Bert start a bicycle repair business. Betty gives Bert $50,000 to start the business but Betty won't be involved in business operations. Bert will run the business by himself. Which of the following is NOT true?

Question 24 24. Which of the following is NOT an aspect of a limited partnership?

Question 25 25. Which one of the following do LPs, LLPS, and LLLPs have in common but is not a characteristic of a general partnership?

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Question 26 26. Andrew, Allen, Alex and Abby are general partners. They own and run an Antelope farm. Andrew put up most of the money to establish the farm, while Abby spends the most time running the farm. There's no partnership agreement on how profits will be shared. How will the farm's profits be split?

Question 27 27. What actions are required in order to form a limited liability partnership?

Question 28 28. Jack and Jill form a partnership. Jack becomes disabled and is no longer able to participate in the partnership. He decides to sell his portion of the business. Their partnership agreement says that Jack must first offer to sell to Jill. This arrangement is known as:

Question 29 29. Jerry and Jenny are partners in a real estate investment group. Jerry invests $500,000 of his own money to acquire properties. Jenny handles the real estate transactions. Jenny is a:

Question 30 30. Which of the following does NOT typically begin the process of ending a partnership?

Partnerships as a Business Entity Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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