Which of the following statements is CORRECT? O a. In a limited partnership, the limited partners have voting control, while the general partner has operating control over the business, and the limited partners are individually responsible, on a pro rata basis, for the firm's debts in the event of bankruptcy. O b. Partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity (difficulty buying and selling) of partnership interests. O c. In a typical partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business. O d. A slow-growth company, with little need for new capital, would be more likely to organize as a corporation than would a faster growing company. O e. A major disadvantage of a partnership relative to a corporation is the fact that federal income taxes must be paid by the partners rather than by the firm itself.

Which of the following statements is CORRECT? O a. In a limited partnership, the limited partners have voting control, while the general partner has operating control over the business, and the limited partners are individually responsible, on a pro rata basis, for the firm's debts in the event of bankruptcy. O b. Partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity (difficulty buying and selling) of partnership interests. O c. In a typical partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business. O d. A slow-growth company, with little need for new capital, would be more likely to organize as a corporation than would a faster growing company. O e. A major disadvantage of a partnership relative to a corporation is the fact that federal income taxes must be paid by the partners rather than by the firm itself.

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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Question

Which of the following statements is CORRECT?
O a. In a limited partnership, the limited partners have voting control, while the general partner has operating control over the business, and the limited partners are individually responsible, on a pro rata basis, for the
firm's debts in the event of bankruptcy.
O b. Partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity (difficulty buying
and selling) of partnership interests.
O c. In a typical partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business.
O d. A slow-growth company, with little need for new capital, would be more likely to organize as a corporation than would a faster growing company.
O e. A major disadvantage of a partnership relative to a corporation is the fact that federal income taxes must be paid by the partners rather than by the firm itself.

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