Accounting Outline Ch 12
Terms in this set (15)
Corporation that does not qualify for nor elect to be treated as a proprietorship or partnership for income tax purposes and therefore is subject to income taxes.
Partner who assumes unlimited liability for the debts of the partnership; responsible for partnership management.
Partnership in which all partners have mutual agency and unlimited liability for partnership debts.
Limited liability company (LLC)
Organization form that combines select features of a corporation and a limited partnership; provides limited liability to its members (owners), is free of business tax, and allows members to actively participate in management.
Limited liability partnership
Partnership in which a partner is not personally liable for malpractice or negligence unless that partner is responsible for providing the service that resulted in the claim.
Partners who have no personal liability for partnership debts beyond the amounts they invested in the partnership.
Partnership that has two classes of partners, limited partners and general partners.
Legal relationship among partners whereby each partner is an agent of the partnership and is able to bind the partnership to contracts within the scope of the partnership's business.
Partner return on equity
Partner net income divided by average partner equity for the period.
Unincorporated association of two or more persons to pursue a business for profit as co-owners.
Agreement among partners that sets terms under which the affairs of the partnership are conducted; also called articles of partnership.
Dissolution of a partnership by (1) selling noncash assets and allocating any gain or loss according to partners' income-and-loss ratio, (2) paying liabilities, and (3) distributing any remaining cash according to partners' capital balances.
Corporation that meets special tax qualifications so as to be treated like a partnership for income tax purposes.
Statement of partners' equity
Financial statement that shows total capital balances at the beginning of the period, any additional investment by partners, the income or loss of the period, the partners' withdrawals, and the partners' ending capital balances; also called statement of partners' capital.
Legal relationship among general partners that makes each of them responsible for partnership debts if the other partners are unable to pay their shares.
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