4. How shall the profits and losses of the partnership be distributed among the partners? a. It should be divided equally. b. It should be divided according to their profits and losses sharing agreement. c. It should be divided proportionately in accordance with capital contribution. d. It should be divided according to what type of partner they are. Answer:
4. How shall the profits and losses of the partnership be distributed among the partners? a. It should be divided equally. b. It should be divided according to their profits and losses sharing agreement. c. It should be divided proportionately in accordance with capital contribution. d. It should be divided according to what type of partner they are. Answer:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:4. How shall the profits and losses of the partnership be distributed among the partners?
a. It should be divided equally.
b. It should be divided according to their profits and losses sharing agreement.
It should be divided proportionately in accordance with capital contribution.
d. It should be divided according to what type of partner they are.
C.
Answer:
5. In the absence of agreement as to the sharing of profits, how shall industrial partner share with it?
a. The industrial partner shall first receive a just and equitable share in the profits before distribution
to capitalist partners.
b. The industrial partner shall share on the basis of loss agreement ratio.
c. The industrial partner shall receive an equal share in profit.
d. The industrial partner shall receive the lowest share received by a capitalist partner.
Transcribed Image Text:QUESTIONS:
1. A sold to B, one of the managing partners of Partnership X, the other being C, a certain number of
mining claims without the consent of C. In an action by A to recover the unpaid balance of the purchase
price against Partnership X, C claims that the contract is not binding upon the partnership for the reason
that under the articles of partnership, there is a stipulation that one of the partners cannot bind the firm
by a written contract without the consent of the others. Is the transaction made by B binding upon the
partnership? Explain.
Answer:
2. Which of the following partners is NOT allowed to participate in the management of a partnership?
Capitalist partner
b. Industrial partner
c. Nominal partner
d. Managing partner
a.
Answer:
3. Which of the following rules of partnership management is NOT observed when the manner of
management has not been agreed upon?
a. All the partners shall be considered agents of the partnership or all of them are managers.
b. Whatever any of the partners may do alone shall bind the partnership.
c. In case of opposition of the other partners, the decision of the majority shall prevail and the decision
of the partners owning the controlling interest shall prevail in case of tie.
d. Any of the partners may make any important alteration in the immovable property of the partnership
without the consent of the others if it may be useful to the partnership.
Answer:
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