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Free AICPA CPA-Business Exam Braindumps (page: 9)

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Page 9 of 132

Unless the partnership agreement prohibits it, a partner in a general partnership may validly assign rights to:

  1. Option A
  2. Option B
  3. Option C
  4. Option D

Answer(s): C

Explanation:

Choice "c" is correct.
Rules: A partner has no right to assign an interest in partnership property because a partner's rights in partnership property are limited to using the property for partnership purposes. However, a partner does have a right to assign her interest in partnership distributions. The assignee does not become a partner, but merely has a right to receive whatever distributions the assignor would have received.
Choices "a", "b", and "d" are incorrect, per the above rules.



Cobb, Inc., a partner in TLC Partnership, assigns its partnership interest to Bean, who is not made a partner. After the assignment, Bean asserts the rights to:

I). Participate in the management of TLC.
II). Cobb's share of TLC's partnership profits. Bean is correct as to which of these rights?

  1. I only.
  2. II only.
  3. I and II.
  4. Neither I nor II.

Answer(s): B

Explanation:

Choice "b" is correct.
Rule: The assignee of a partner's interest in the partnership does not thereby become a partner absent the unanimous consent of the other partners. Thus, the assignee has no right to participate in the management of the partnership and has only a right to receive the assignor's share of the partnership profits.
Choices "a", "c", and "d" are incorrect, per the above rules.



A partner's interest in specific partnership property is:

  1. Option A
  2. Option B
  3. Option C
  4. Option D

Answer(s): D

Explanation:

Choice "d" is correct. No - No.
Rule: A partner's interest in specific partnership property is neither assignable to the partner's individual creditors nor is it subject to attachment by the partner's individual creditors.
Choices "a", "b", and "c" are incorrect, per the above rule.



If no provisions are made in an agreement, a general partnership allocates profits and losses based on the:

  1. Value of actual contributions made by each partner.
  2. Number of partners.
  3. Number of hours each partner worked in the partnership during the year.
  4. Number of years each partner belonged to the partnership.

Answer(s): B

Explanation:

Choice "b" is correct. Absent an agreement to the contrary, all partners have equal rights to share in the profits of the partnership.
Choices "a", "c", and "d" are incorrect, per the above explanation.






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