(b) Mark Rensing has prepared the following list of statements about partnerships. 1. A partnership is an association of three or more persons to carry on as co-owners of a business for profit. 2. The legal requirements for forming a partnership can be quite burdensome. 3. A partnership is not an entity for financial reporting purposes. 4. The net income of a partnership is taxed as a separate entity. 5. The act of any partner is binding on all other partners, even when partners perform business acts beyond the scope of their authority. 6. Each partner is personally and individually liable for all partnership liabilities. 7. When a partnership is dissolved, the assets legally revert to the original contributor. 8. In a limited partnership, one or more partners have unlimited liability and one or more partners have limited liability for the debts of the firm. Instructions Identify each statement as true or false. If false, indicate how to correct the statement.
(b) Mark Rensing has prepared the following list of statements about partnerships. 1. A partnership is an association of three or more persons to carry on as co-owners of a business for profit. 2. The legal requirements for forming a partnership can be quite burdensome. 3. A partnership is not an entity for financial reporting purposes. 4. The net income of a partnership is taxed as a separate entity. 5. The act of any partner is binding on all other partners, even when partners perform business acts beyond the scope of their authority. 6. Each partner is personally and individually liable for all partnership liabilities. 7. When a partnership is dissolved, the assets legally revert to the original contributor. 8. In a limited partnership, one or more partners have unlimited liability and one or more partners have limited liability for the debts of the firm. Instructions Identify each statement as true or false. If false, indicate how to correct the statement.
Chapter20: Corporations And Partnerships
Section: Chapter Questions
Problem 21DQ
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Question
Transcribed Image Text:(b) Mark Rensing has prepared the following list of statements about partnerships.
1. A partnership is an association of three or more persons to carry on as co-owners of a business
for profit.
2. The legal requirements for forming a partnership can be quite burdensome.
3. A partnership is not an entity for financial reporting purposes.
4. The net income of a partnership is taxed as a separate entity.
5. The act of any partner is binding on all other partners, even when partners perform business
acts beyond the scope of their authority.
6. Each partner is personally and individually liable for all partnership liabilities.
7. When a partnership is dissolved, the assets legally revert to the original contributor.
8. In a limited partnership, one or more partners have unlimited liability and one or more partners
have limited liability for the debts of the firm.
Instructions
Identify each statement as true or false. If false, indicate how to correct the statement.
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