Which of the following is a TRUE statement about the characteristics of partnerships?
A)In a limited liability partnership,all partners have limited liability for the partnership's debts.
B)General partners in a general partnership have mutual agency and limited liability for the partnership's debts.
C)Income and losses of the partnership "flow through" to the partners.
D)The partnership agreement must be in writing.

Question

Quizplus · Accepted Answer

One of the characteristics of a partnership is that the income and losses of the partnership "flow through" to the partners. This means that the partners report their share of the partnership's income or losses on their personal tax returns.

Option A is not true because in a limited liability partnership, only some partners have limited liability, while others have unlimited liability.

Option B is not true because in a general partnership, all partners have mutual agency and unlimited liability for the partnership's debts.

Option D is not true because a partnership agreement can be either written or oral, though it is highly recommended to have a written agreement to avoid misunderstandings in the future.

Which of the Following Is a TRUE Statement About the Characteristics