37) Which of the following is TRUE of a written partnership agreement?

A) It is an agreement in which the partners hold a direct agreement with the registration body, and the registration body acts as an interlocutor between the partners.

B) It is an informal agreement between the partners and is not legally binding.

C) It is a legally-binding agreement between the owners which explains the procedures for liquidating the partnership.

D) It is a legally binding agreement between the proprietors and the stock exchange where it is listed regarding the profit sharing between the owners.

38) Which of the following is specified in the articles of partnership?

A) procedures for withdrawal of assets by the partners

B) procedures for distribution of dividends

C) methods for valuation of the assets

D) selection of an appropriate depreciation method

39) Which of the following will result in the dissolution of a partnership?

A) admission of a new partner

B) purchase of plant assets for the business

C) contribution of an asset by an existing partner

D) a partner's withdrawal of cash from the partnership

40) A firm has two partners: Jim and Bill. Jim owns 60% of the partnership and Bill owns 40%. In which of the following transactions will the partnership be held responsible for an individual partners' actions?

A) Jim signs a contract as a guarantor for Bill's personal loan.

B) Jim buys a laptop on credit for personal use.

C) Bill signs a contract to buy furniture for official use in the partnership.

D) Bill defaults on payment of his personal credit card bill.