AICPA CPA-Business Exam - Topic 2 Question 3 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 3
Topic #: 2

[All CPA-Business Questions]

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.

AI only.

BII only.

CBoth I and II

DNeither I nor II

Show Suggested Answer

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.

by Yoko at May 07, 2022, 12:36 AM

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Gussie

5 months ago

I always thought co-ownership of property was essential too.

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Justa

6 months ago

Wait, are you sure about that? Sounds a bit off.

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Lili

6 months ago

Actually, II alone could suffice in some cases.

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Evelynn

6 months ago

Totally agree, co-ownership is key!

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Jess

6 months ago

I think both I and II are needed for a valid partnership.

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Melissa

6 months ago

Hmm, I'm a bit confused about the distinction between the all_, dba_, and useb_ views. I'll need to review my notes on the data dictionary to make sure I understand which one displays what information.

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