Partnership Characteristics Quiz

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson
Download our mobile app to listen on the go
Get App

Questions and Answers

What happens to a partnership when a partner withdraws?

  • The partnership automatically ends.
  • Dissolution occurs, but the business may continue. (correct)
  • The assets are divided among the remaining partners.
  • The remaining partners must start a new business.

What does unlimited liability mean for partners in a partnership?

  • Partners have limited responsibility for business debts.
  • Partners' personal assets are protected from business liabilities.
  • Partners can only lose the amount they invested.
  • Each partner is personally liable for all debts of the partnership. (correct)

Which of the following accurately describes the concept of limited life in partnerships?

  • Partnerships automatically renew after a certain period.
  • The partnership's existence is unaffected by the addition of new partners.
  • The partnership can live indefinitely regardless of any partner's status.
  • A partnership can dissolve if any partner withdraws or a new partner is admitted. (correct)

Which statement is true about the dissolution of a partnership?

<p>Dissolution does not necessarily mean the business ceases to operate. (C)</p> Signup and view all the answers

What is NOT a characteristic of a partnership form of business organization?

<p>Partnerships can exist independently of partners. (A)</p> Signup and view all the answers

Flashcards

Partner Withdrawal Effect

Occurs when a partner leaves, but the business itself might still continue operating.

Unlimited Liability

Each partner is responsible for all business debts, even with personal assets.

Limited Life

The partnership ends if a partner leaves or a new one joins.

Dissolution Outcome

Dissolution means change, but the business can still run.

Signup and view all the flashcards

Partnership Existence

A partnership relies on its partners and cannot exist separately from them.

Signup and view all the flashcards

Study Notes

Partnership Characteristics

  • Limited Life: Partnerships dissolve when a partner leaves or a new partner joins. Dissolution does not necessarily mean the business closes, it only means the existing partnership ends.
  • Unlimited Liability: Each partner is personally responsible for all the partnership's debts. This means creditors can pursue individual partners for the full amount of the debt, even if the partnership itself cannot pay.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

More Like This

Use Quizgecko on...
Browser
Open
Browser
Browser