Self Assessment Quizzes

CHAPTER 27: Section 1 Partnership Characteristics and Partner's Equity

	1.	A document that set out the terms under which a partnership will operate is called a

		a.	mutual agreement
		b.	mutual agency
		c.	partnership agreement
		d.	partnership contract

	2.	A partnership

		a.	has a limited life
		b.	has an unlimited life
		c.	can only exist for 10 years
		d.	can only operate with a formal agreement

	3.	A partnership consists of

		a.	two or more people
		b.	three people
		c.	two people
		d.	four or more people

	4.	If a partner withdraws from a partnership, the partnership

		a.	must find a new partner
		b.	continues
		c.	becomes a corporation
		d.	dissolves

	5.	When a partner invests noncash assets in the business they are recorded at

		a.	purchase price
		b.	whatever price is agreed upon
		c.	market value of the assets
		d.	equal value to other partners` assets

	6.	Partners` equity consists of

		a.	one capital account
		b.	two or more capital accounts
		c.	no capital accounts
		d.	withdrawals only