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AICPA Exam CPA-Business Topic 2 Question 3 Discussion
Actual exam question for
AICPA's
CPA-Business exam
Question #: 3
Topic #: 2
[All CPA-Business Questions]
Topic #: 2
Which of the following requirements must be met to have a valid partnership exist?
I Co-ownership of all property used in a business.
II Co-ownership of a business for profit.
Suggested Answer:
B
Choice "b" is correct.
Rule: A partnership is defined as an association of two or more persons who agree to carry on as coowners a business for profit. Thus, II is necessary. However, there is no requirement that all property used in the business be co-owned; it may be owned by individual partners. Thus I is not necessary.
Choices "a", "c", and "d" are incorrect, per the above rule.
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