BUL 5810 STUDY EXAM UPDATED QUESTIONS AND
ANSWERS GRADED A+
✔✔In deciding whether property owned by a partner before formation of the partnership
and used
in the business is a capital contribution that belongs to the firm, a court will consider
which of the
following?
(A) Whether the property was improved with partnership funds
(B) Whether the property was carried on the books of the partnership as an asset
(C) Admissions or declarations of the partners
(D) All of these would be considered. - ✔✔(D) All of these would be considered.
✔✔Which of the following expresses the right one has to choose her partners?
(A) Partnership by estoppel
(B) Delectus personae
(C) Entity theory
(D) Fiduciary relationship - ✔✔(B) Delectus personae
✔✔Which of the following would be the most convincing evidence of a partnership?
(A) An agreement to share in the management of a business
(B) Agreements to share gross returns
(C) An agreement to share losses
(D) An agreement to pay a firm manager a percentage of the profits for his salary -
✔✔(C) An agreement to share losses
✔✔General Widget partnership assets amount to $34,000 after liquidation. Frank,
Gene, and Hank,
equal partners, each contributed $3,000 into the capital pool at the inception of the
business. Gene
later loaned the business $5,000. They owe $23,000 to creditors for inventory. What will
Gene get in
distribution, assuming there is no agreement on the distribution of profits?
(A) $7,000
(B) $5,000
(C) $8,000
(D) $11,000 - ✔✔(A) $7,000
✔✔The principal legal duties imposed upon partners in their relations with one another
include:
(A) the fiduciary duty or the duty of loyalty.
(B) the duty to compensate other partners for their time and efforts spent on partnership
business.
(C) a duty to devote full time and expertise to the partnership.
,(D) a duty to vote for candidates that will help the business. - ✔✔(A) the fiduciary duty
or the duty of loyalty.
✔✔Clark and David are partners. Clark has contributed $25,000. David has contributed
only his
time and skill. On dissolution, after all firm debts are paid, $20,000 in assets remains.
Which of the
following is NOT correct?
(A) The $20,000 remaining after payment is profit that will be equally divided.
(B) The partnership has sustained a loss of $5,000.
(C) David is not entitled to any part of the $20,000.
(D) David has no obligation to reimburse Clark for any loss. - ✔✔(A) The $20,000
remaining after payment is profit that will be equally divided.
✔✔The Oak Grove Partnership decided it would buy personal computers for use by
each partner.
Unknown to the other partners, Cromwell, a partner, had an ownership interest in a
computer store
and thought he could get the computers for the partnership at the best price because of
his inside
position. He did, in fact, obtain eight computers at only $150 above the manufacturer's
price, which
was $250 less than the next lowest bid for each computer. What consequence?
(A) Because Cromwell did not tell his partners of his inside position with the computer
store, there
will be no sale.
(B) Since Cromwell obtained the lowest price available, the deal will go through.
(C) Cromwell will have to give his part of the sales profits to the partnership.
(D) Cromwell will have to rescind the contract and go with the next highest bidder. -
✔✔C) Cromwell will have to give his part of the sales profits to the partnership.
✔✔The Oak Grove Partnership decided it would buy personal computers for use by
each partner.
Cromwell, a partner, had an ownership interest in a computer store. He thought he
could get the
computers for the partnership at the best price because of his inside position, and he
told his
partners at Oak Grove about his position. He did obtain eight computers for $150 over
manufacturer's price, which was $250 less per computer than the next lowest bid. What
consequence?
(A) There was a sale, but no profit to the computer store.
(B) There was a sale, but the computer store would only receive a percentage of the
profit equal to
Cromwell's ownership interest in the store and the partnership would receive the
balance.
, (C) There was a sale, and the computer store would receive the profit of $150 per
computer.
(D) There would be no sale, because Cromwell had an interest in both businesses. -
✔✔(C) There was a sale, and the computer store would receive the profit of $150 per
computer.
✔✔Drew, Elmer, and Frank are partners in the DEF partnership. The partnership is
being dissolved.
It has $200,000 in cash assets and it owes $410,000 to creditors. Profits and losses of
the partners
are shared equally, although Drew contributed $100,000 in capital; Elmer contributed
$50,000 in
capital; and Frank contributed $25,000 in capital. Which of the following is correct with
regard to
the responsibility of each partner?
(A) Each partner is responsible for $70,000 of the money owed to creditors.
(B) Elmer will have to contribute additional capital in order to settle the partnership
affairs.
(C) Drew will have to contribute additional capital in order to settle the partnership
affairs.
(D) All of these are correct. - ✔✔(D) All of these are correct.
✔✔The law of partnership is very similar to the law of agency. - ✔✔true
✔✔Under the UPA, any suit in contract against the partners must name all of them as
defendants - ✔✔true
✔✔Under the RUPA, during winding up, the partnership must apply its assets first to
discharge the
obligations of partners who are creditors on parity with other creditors, subject to any
other laws. - ✔✔true
✔✔Maizie is admitted as a partner to the existing Greene Ridge Partnership in June of
2018. Unless
she signs an agreement to the contrary, she will be personally liable on all partnership
obligations,
including one incurred in December of 2017. - ✔✔false
✔✔A partner's notification of a fact relating to the partnership is not effective against the
other
partners until the relevant fact is entered on the minutes at the next partnership
meeting. - ✔✔false
ANSWERS GRADED A+
✔✔In deciding whether property owned by a partner before formation of the partnership
and used
in the business is a capital contribution that belongs to the firm, a court will consider
which of the
following?
(A) Whether the property was improved with partnership funds
(B) Whether the property was carried on the books of the partnership as an asset
(C) Admissions or declarations of the partners
(D) All of these would be considered. - ✔✔(D) All of these would be considered.
✔✔Which of the following expresses the right one has to choose her partners?
(A) Partnership by estoppel
(B) Delectus personae
(C) Entity theory
(D) Fiduciary relationship - ✔✔(B) Delectus personae
✔✔Which of the following would be the most convincing evidence of a partnership?
(A) An agreement to share in the management of a business
(B) Agreements to share gross returns
(C) An agreement to share losses
(D) An agreement to pay a firm manager a percentage of the profits for his salary -
✔✔(C) An agreement to share losses
✔✔General Widget partnership assets amount to $34,000 after liquidation. Frank,
Gene, and Hank,
equal partners, each contributed $3,000 into the capital pool at the inception of the
business. Gene
later loaned the business $5,000. They owe $23,000 to creditors for inventory. What will
Gene get in
distribution, assuming there is no agreement on the distribution of profits?
(A) $7,000
(B) $5,000
(C) $8,000
(D) $11,000 - ✔✔(A) $7,000
✔✔The principal legal duties imposed upon partners in their relations with one another
include:
(A) the fiduciary duty or the duty of loyalty.
(B) the duty to compensate other partners for their time and efforts spent on partnership
business.
(C) a duty to devote full time and expertise to the partnership.
,(D) a duty to vote for candidates that will help the business. - ✔✔(A) the fiduciary duty
or the duty of loyalty.
✔✔Clark and David are partners. Clark has contributed $25,000. David has contributed
only his
time and skill. On dissolution, after all firm debts are paid, $20,000 in assets remains.
Which of the
following is NOT correct?
(A) The $20,000 remaining after payment is profit that will be equally divided.
(B) The partnership has sustained a loss of $5,000.
(C) David is not entitled to any part of the $20,000.
(D) David has no obligation to reimburse Clark for any loss. - ✔✔(A) The $20,000
remaining after payment is profit that will be equally divided.
✔✔The Oak Grove Partnership decided it would buy personal computers for use by
each partner.
Unknown to the other partners, Cromwell, a partner, had an ownership interest in a
computer store
and thought he could get the computers for the partnership at the best price because of
his inside
position. He did, in fact, obtain eight computers at only $150 above the manufacturer's
price, which
was $250 less than the next lowest bid for each computer. What consequence?
(A) Because Cromwell did not tell his partners of his inside position with the computer
store, there
will be no sale.
(B) Since Cromwell obtained the lowest price available, the deal will go through.
(C) Cromwell will have to give his part of the sales profits to the partnership.
(D) Cromwell will have to rescind the contract and go with the next highest bidder. -
✔✔C) Cromwell will have to give his part of the sales profits to the partnership.
✔✔The Oak Grove Partnership decided it would buy personal computers for use by
each partner.
Cromwell, a partner, had an ownership interest in a computer store. He thought he
could get the
computers for the partnership at the best price because of his inside position, and he
told his
partners at Oak Grove about his position. He did obtain eight computers for $150 over
manufacturer's price, which was $250 less per computer than the next lowest bid. What
consequence?
(A) There was a sale, but no profit to the computer store.
(B) There was a sale, but the computer store would only receive a percentage of the
profit equal to
Cromwell's ownership interest in the store and the partnership would receive the
balance.
, (C) There was a sale, and the computer store would receive the profit of $150 per
computer.
(D) There would be no sale, because Cromwell had an interest in both businesses. -
✔✔(C) There was a sale, and the computer store would receive the profit of $150 per
computer.
✔✔Drew, Elmer, and Frank are partners in the DEF partnership. The partnership is
being dissolved.
It has $200,000 in cash assets and it owes $410,000 to creditors. Profits and losses of
the partners
are shared equally, although Drew contributed $100,000 in capital; Elmer contributed
$50,000 in
capital; and Frank contributed $25,000 in capital. Which of the following is correct with
regard to
the responsibility of each partner?
(A) Each partner is responsible for $70,000 of the money owed to creditors.
(B) Elmer will have to contribute additional capital in order to settle the partnership
affairs.
(C) Drew will have to contribute additional capital in order to settle the partnership
affairs.
(D) All of these are correct. - ✔✔(D) All of these are correct.
✔✔The law of partnership is very similar to the law of agency. - ✔✔true
✔✔Under the UPA, any suit in contract against the partners must name all of them as
defendants - ✔✔true
✔✔Under the RUPA, during winding up, the partnership must apply its assets first to
discharge the
obligations of partners who are creditors on parity with other creditors, subject to any
other laws. - ✔✔true
✔✔Maizie is admitted as a partner to the existing Greene Ridge Partnership in June of
2018. Unless
she signs an agreement to the contrary, she will be personally liable on all partnership
obligations,
including one incurred in December of 2017. - ✔✔false
✔✔A partner's notification of a fact relating to the partnership is not effective against the
other
partners until the relevant fact is entered on the minutes at the next partnership
meeting. - ✔✔false
