Which of the following is a disadvantage of general partnerships? ( a) The partners in a general partnership are exposed to double taxation. ( b) Compared to the other forms of ownership, the paperwork and costs involved in forming a general partnership are the most extensive. ( c) A partner who withdraws from a partnership cannot be held liable for any debts the furm had at the time of withdrawal. ( d) All general partners have unlimited liability for the debts and obligations of their business.

1. In a partnership liquidation the realization losses result in a debit balance in one partners’ capital account. If this partner fails to contribute personal assets to make up this deficit, how should the debit balance be handled by the partners?   a. It should be written off against partnership profits like any other bad debt.   b. It should be allocated to all the partners in their profit and loss ratio.   c. It should be allocated to the remaining partners in their remaining P and L ratio.   d. It should be set up as a receivable and turned over to a collection agency.     2. During liquidation, a partners’ capital account balance drops below zero. What should happen?   a. The other partners should file a legal suit against the partner with the deficit balance.   b. The partner with the highest capital balance should contribute sufficient assets to eliminate the deficit.   c. The deficit balance…

In the liquidation of a partnership, why might a partner be concerned that a fellow partner has a deficit net capital balance, and how might such a deficit be eliminated?

11. A deficiency occurs for a partner whena. his personal assets are less than his personal liabilities.b his share in the losses of the partnership is more than his capital balancec. his personal assets are lesser than his capital balance.d. loan payable by the partnership to him is greater than his capital balance.

Sonia and Fred are partners in a CPA firm that was formed as a Limited Liability Partnership (LLP). If Sonia commits malpractic in the preparation of client financial statements, are the partner's personal assets at risk to pay damages caused by Sonia? a. Yes, Sonia's assets are at risk b. No, the LLP shields Sonia's personal assets from malpractice c. No, the LLP shields the personal assets of both partners from malpractice d. Yes, Sonia and Fred's personal assets are at risk

A disadvantage that is NOT peculiar to the partnership form of organization includes a.the interest of a partner in the partnership cannot be transferred without the consent of the other partners. b.termination of the partnership agreement, bankruptcy of the firm, or death of one of the partners dissolves the partnership. c.each partner is individually liable for all of the debts of the partnership. d.the partners do not make the decisions that run the business.

In the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. True False

Potential partners might not want to form a partnership because of the risk of having their personal property forfeited in favor of the business’s creditors. True or False

A firm in which A, B and C were partners, placed an order with D for supplying certain goods on credit. Before D could supply the goods C died. D supplied the goods after C’s death, being totally ignorant about the fact. A and B subsequently became insolvent. Can D make C’s estate liable for his debt.