1) Bill and Carol are the only partners in an accounting firm the partnership ca
ID: 353591 • Letter: 1
Question
1) Bill and Carol are the only partners in an accounting firm the partnership can be treated as a) an aggregate b) an entity c) a partner d) none of the above 2) Kim, Lynn, and Mike agree to be partners in Northwest Tours, a prlit the profits travel agency. Kim contributes 75 percent of the capital. The partners agree ter than its assela equally. When Northwest is dissolved, its liabilities are greater th The losses are paid by a) Kim because he contributed most of the capital. b) Lynn and Mike because they contributed the least of the capital c) all of the partners in proportion to their capital contributions. assets d) all of the partners in proportion to their shares of the profits. e) all of the above Donna initiates and assumes the financial risk of Excel Manufacturing & Marketing, which is a new enterprise. Donna is a) a franchisee b) a franchisor c) an entrepreneur d) none of the above 4) Tina owns United Enterprises, a sole proprietorship. In a sole proprietorship, the liability of the owner is a) limited to the extent of his or her original investment. limited to the extent of his or her original investment plus any subsequent capital expenditures. b) c) limited by state statute and varies from state to state. d) unlimited 5) Pete's Pizza, Inc., grants a franchise to Randy to operate a Pete's Pizza restaurant. Pete's Pizza may charge Randy a) a license fee only b) a price for supplies only c) a license fee and a price for supplies d) none of the aboveExplanation / Answer
1. option C is correct. It must be considered as partners only. Hence option C is correct.
2. In partnership firms, the profits and lossess must be shared among all the partners with proportinonate to their capital investments only. In this case, 75% lossess must be paid Kim and 25% loss must be paid by Lynn. Hence option C is correct.
3. an entrepreneur is the right answer. He is the person who takes risk over the busienss bare all the risks, Hence option C is correct.
4. in sole trader firms, there is no differencen between busienss and owner. Here the business lossess can be recovered by owning the owner personal assets including home. Hence, the lossess are beyond to the capital contribution. Hence, option B is correct.
5. option A is correct, franchisee gets license to operate the business with the name. In the given case Pete pizza given license to Randy and charge a fee but do not supply anything.
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