UTech IFACC Quiz- Partnerships

Select the incorrect statements about Partnership

• It usually emerge from a Sole Trader business

• It consists of two or more persons carrying out a trade

• Unlike other business the aim is not always to make profit

• A partnership denotes a principal-agency relationship

Identify the advantages of a Partnership agreement

• Principals bring their knowledges together

• Capital base is broadened

• Financial resources are polled together

• Unlimited liabilities

A partnership is regulated by a

(a)  

All are disadvantages t Partnership, except.

• Expertise are polled

• Unlimited Liabilities

• Profits will be shared

• Decision making requires consultation amongst partners

Identify the components of a Partnership agreement

• Payment of Interest on Capital Invested

• Limitations on drawings by each partner

• The payment of salaries

• Ratio by which profits/loss will be shared

Should a situation arise that was not crafted in the Partnership agreement, same will be dealt with in accordance with the Partnership Act.

• True

• Fals

A general partner contributes capital, is fully involved in the business and has unlimited liability

• True

• False

The sleeping partner

• Is also known as the dormant or silent partner

• Has unlimited liability

• Does not contribute capital

• Has no involvement in the day to day operations

The Nominal Partner

• Makes a capital contribution

• Identify as being associated with the partnership

• Is involve in the business' operation

• has limited liability to the partnership

The limited partner

• contributes capital

• isn't involved in the operations

• has limited liability of the partnership

• does not contribute capital