Answered: . X assigned his partnership shares to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. X assigned his partnership shares to Y. X did not get the consent from the other partners but he informed them that he is assigning all his rights to Y. From among the list, what is NOT a right available to Y?

a. Right to assets after dissolution

b. Right for accounting

c. Share in the profits

d. Inspect the books

2. Before the partnership was executed, the partners agreed that they will only exist for 10 years. On the 10th year, the partnership started its dissolution. What kind of dissolution is applied?

a. By operation of law

b. Judicial

c. Extrajudicial

d. None of the above

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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