ACFAR IFA TOPIC 10 & 11 (IDENTIFICATION) QUESTION WITH COMPLETE SOLUTIONS

Interest on loans from partners is recognized as partnership income. Correct Answer INDUSTRIAL PARTNER An estimated amount that a willing seller would receive from a financially capable buyer for the sale of the asset in a free market. Correct Answer FAIR MARKET VALUE Where agreements of the partners are embodied. Correct Answer ARTICLES OF PARTNERSHIP One who takes active part in the business of the partnership though may be known as a partner. Correct Answer SILENT PARTNER One who is designated to wind up or settle the affairs of the partnership after dissolution. Correct Answer LIQUIDATING PARTNER In partnership, each of the partners except a limited partner is liable to the extent of his personal assets,; in a corporation, stockholders are liable only to the extent of their investment in the corporation. Correct Answer EXTENT OF LIABILITY Two or more persons may form a partnership. In a corporation, at least 5 persons, not exceeding 15. Correct Answer NUMBER OF PERSONS In a partnership, for any period of time stipulated by the partners in a corporation, not to exceed 50 years but to extension. Correct Answer TERMS OF EXISTENCE A partnership is created by mere agreement of the partners while a corporation is created by operation of law. Correct Answer MANNER OF CREATION