CHOOSE THE CORRECT ANSWER

1. The other partners must absorb the deficiency in a partner's capital account in liquidation because of:

a.) Limited life and co-ownership of property

b.) Mutual agency and partnership taxability

c.) Limited life and mutual agency

d.) Mutual agency and unlimited liability

2. It is the right of all partners to represent the business and bind the partnership to contracts and agreements.

a. Limited liability

b. Unlimited liability

c. Mutual agency

d. Separate legal entity

3. It is a portion of a partner's capital account balance that is restricted for possible losses on liquidation and therefore not available for cash payment.

a. Free interest

b. Capital deficiency

c. Insolvent partner

d. Restricted interest

4. It is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.

a.) Cooperative

b.) Sole Prorietorship

c.) Partnership

d.) Corporation

5. The ownership of share capital entitles ordinary shareholders to all of the following rights except:

a. preemptive right

b. right to receive guaranteed dividends

c. voting right

d. right to receive a proportionate share of assets in corporate liquidation