Question

1) Fred and Barney agree while talking on the phone to form a partnership. Their partnership agreement is legally binding

a. only if it is subsequently put in writing

b. only if a subsequent writing is filed with the state

c. only if each partner gives consideration to the other

d. without any further measures

2) Hillary, a partner in an LLC, owes $100,000 personally to several creditors. To satisfy these debts, the creditors may obtain an order entitling them to:

a. Hillary's profits as a partner

b. Hillary's interest in partnership assets

c. both a and b

d. none of the above

3) Generally accepted accounting principles that can determine whether an accountant is negligent, are determined by rules, releases and pronouncements of

a. the Securities and Exchange Commission

b. the American Institute of Certified Public Accountants

c. the Financial Accounting Standards Board

d. all of the above

4) How is Apparent authority created?

a. By perceptions of third parties that have been created by the principal

b. By agreement

c. By implication

d. By either agreement or implication

5) Schuh hired Jack for six months as an assistant sales manager at $4000 a month plus 3% of sales.

a. The agreement must be in writing and signed by the party to be charged.

b. This is an independent contractor agreement

c. Jack must disclose to Schuh any interests that are adverse to Schuh's business

d. Jack can be dismissed at any time during the six month period of employment

Answer 1

Answer:

1, option: a) only if it is put subsequently in writing.

A partnership agreement is legally binding only when it is put in writing.

2, option: c) both a and b.

Creditors have the right to obtain an order against the partners profits and his interest in the partnership assets for settlement of their debts.

3, option: d) all of the above.

4, option: a) By perception of third parties that have been created by the principal.

5, option: a) The agreement must be in writing and signed by the party to be charged.