Answered: This is a characteristic of a limited…

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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This is a characteristic of a limited partner.
a. Limited Life
b. Unlimited Life
c. Unlimited Liability
d. Limited Liability

After the first two steps of the closing entries, the entry to record the distribution of profit will include a debit to ____.
a. Withdrawal
b. Salary
c. Capital
d. Income Summary

In the absence of loss sharing agreement, losses shall not be divided among the partners.
a. true
b. false

Ownership is easily transferred in a partnership.
a. true
b. false

A partner who is known by outside parties as a partner but is not active in partnership operations
a. Ostensible Partner
b. Secret Partner
c. Silent Partner
d. Dormant Partner

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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