1. Joint and several liability in a partnership means that:

a. Each partner has personal liability for partnership obligations.

b. Each partners personal liability for partnership obligations is limited to their initial investment in the partnership.

c. Each partners personal liability for partnership obligations is limited to the balance in their capital account.

d. Partners are responsible for their own actions but not the actions of the other partners.

2. A salary paid to a partner is reported as:

a. A reduction in his or her capital account

b. A charge to dividends, a temporary account closed to partnership retained income

c. An expense, reducing partnership income

d. A deferred outflow, amortized to expense over time

3. Which statement is true concerning a Chapter 7 liquidation?

a. Chapter 7 is applicable to businesses but not individuals.

b. Proceedings from the sale of assets are distributed to creditors on a pro rata basis.

c. A company may be allowed to remain in possession of its assets during liquidation.

d. Obligations to employees are not discharged once Chapter 7 proceedings are complete.