For a business organized as a general partnership, which statement is true?
Posted: Sat Aug 07, 2021 7:04 am
A) The owners and the business are separate legal entities.
B) Each partner is potentially responsible for the debts of the business.
C) Formation of a partnership requires getting a charter from the state of incorporation.
D) A partnership is not considered to be a separate accounting entity.
Answer: B
Explanation: Legally, each partner in a general partnership is responsible for the debts of the
business. In this case, each general partner has unlimited liability.
B) Each partner is potentially responsible for the debts of the business.
C) Formation of a partnership requires getting a charter from the state of incorporation.
D) A partnership is not considered to be a separate accounting entity.
Answer: B
Explanation: Legally, each partner in a general partnership is responsible for the debts of the
business. In this case, each general partner has unlimited liability.