PARTNERSHIP AND CORPORATION- FORMATION AND DIVISION OF PROFIT

In a general partnership, only a majority of artners need to have unlimited liability to partnership creditors.

• true

• false

Partnerships are not required to pay taxes

• true

• false

The entity theory of equity is based on the notion that a business entity is distinct from the owners.

• true

• false

If there is conflict between agreed value and fair value, agreed value prevails.

• true

• false

There should always be at least one general partner in all types of partnership.

• true

• false

A partner who is active in the business and also known to the public is a dormant partner

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• false

the assumption of a liability by the partnership with regard to a noncash asset contributed in the partnership by a partner will affect the value assigned to the partner’s capital account

• true

• false

When property other that cash is invested in a partnership, the assessed valuation for property tax purposes should be the amount to be credited to the contributing partner’s capital account.

• true

• false

By the contract of partnership, partners bind themselves to contribution money,

property or industry to a common fund with the intention of dividing profits equally.

• true

• false

The income earned by a partnership will always be greater than the income earned by a proprietorship because in a partnership there is more than one owner contributing to the

success of the business

• true

• false