Reference no: EM132786870

Problem 1: Which of the following is true of a written partnership agreement?

a. It is an agreement in which the partners hold a direct agreement with the registration body, and the registration body acts as an interlocutor between the partners.

b. It is an informal agreement between the partners and is not legally binding.

c. It is a legally-binding agreement between the owners which explains the procedures for liquidating the partnership.

d. It is a legally-binding agreement between the proprietors and the stock exchange where it is listed regarding the profit sharing between the owners.

Problem 2: When an existing partner sells his interest to another party in a personal transaction:

a. it is considered a transaction between the partnership and the new party.

b. the old partnership will continue functioning, since the partner is replaced by another party without diluting the old partnership.

c. the journal entry simply debits the withdrawing partner's capital account and credits the new partner's capital.

d. the equity and assets in the balance sheet increase by the same amount.

Problem 3:  Which of the following is not a characteristic of a general partnership?

a. the partnership is created by a contract

b. mutual agency

c. partners share equally in net income or net losses unless an agreement states differently

d. dissolution occurs only when all partners agree