Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business. Thomas dies suddenly of a heart attack. What will most likely become of the partnership?
A) It will immediately cease to exist and Daniel and Lucas will have to find new jobs.
B) Thomas's share of the business will automatically be split between Daniel and Lucas.
C) Daniel and Lucas will be able to purchase Thomas's interest from his estate.
D) Daniel and Lucas will have to quickly find a new partner to take Thomas's place.
E) It will dissolve, and Daniel and Lucas will lose personal property to pay business debts.
Question 2 - What is the correct order for the balance sheet?
A) Assets, owners' equity, liabilities
B) Owners' equity, financial position, assets
C) Liabilities, owners' equity, assets
D) Assets, liabilities, owners' equity
E) Owners' equity, assets, liabilities
Question 3 - Janna owns a jewelry shop that sells handmade jewelry. Her employees are paid a certain amount for each bracelet and necklace they produce, regardless of the amount of time it takes. This is a
A) wage system.
B) salary system.
C) quota compensation.
D) piece-rate system.
E) commission plan.
Question 4 - While raising start-up funds from friends and family, it is:
A) acceptable to not repay them.
B) essential to involve them in company dealings.
C) acceptable to not document the financing.
D) essential to keep the relationship as professional as possible.
Question 5 - Quarrels among business associates have become common. The associates quarrel over what products the firm should sell, division of authority, selection of personnel, whether to bring family members into the business, whether to expand, and who is contributing most to the firm's success. Such feuding, which damages business relationships, occurs most frequently in what form of business?
A) Partnerships
B) Cooperatives
C) Corporations
D) Sole proprietorships
E) S-corporations
Quick Reply
