#1
What is a partnership in accounting?
A business owned by two or more individuals
ExplanationJoint ownership of a business by multiple individuals.
#2
What is limited liability in a partnership?
Partners are only responsible for a portion of business debts
ExplanationPartners are not personally liable for all business debts.
#3
Which of the following is NOT a type of partnership?
Corporation
ExplanationCorporation is not a form of partnership.
#4
Which statement about general partnerships is true?
Each partner has unlimited liability for the business debts
ExplanationAll partners are fully liable for business debts.
#5
In a limited partnership, what are the roles of general partners and limited partners?
General partners have unlimited liability, while limited partners have limited liability
ExplanationDifferent levels of liability exist between general and limited partners.
#6
What is joint liability in a partnership?
Partners share responsibility equally for business debts
ExplanationEqual responsibility among partners for debts.
#7
Which statement about a limited liability partnership (LLP) is true?
It is a type of partnership where all partners have limited liability
ExplanationAll partners in an LLP have limited liability.
#8
In a limited partnership, who are the limited partners?
Partners who are only liable for their investment in the business
ExplanationLimited partners have liability limited to their investment.
#9
Which of the following is a disadvantage of a partnership?
Difficulty in raising capital
ExplanationPartnerships may face challenges in obtaining funds.
#10
What is the main advantage of a limited liability partnership (LLP)?
Limited liability for all partners
ExplanationAll partners enjoy limited liability protection.
#11
What is the significance of a partnership agreement?
It outlines the terms of partnership including profit sharing and decision-making
ExplanationDefines terms and conditions of the partnership.
#12
What is the difference between a general partnership and a limited partnership?
Limited partnerships have limited liability for some partners
ExplanationLimited partners have liability protection.
#13
Which statement about partnership taxation is true?
Partnerships are subject to pass-through taxation
ExplanationTaxation where profits pass directly to partners.