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AICPA Exam CPA-Business Topic 3 Question 106 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 106
Topic #: 3
[All CPA-Business Questions]

The apparent authority of a partner to bind the partnership in dealing with third parties:

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Suggested Answer: C

Choice 'c' is correct. The most logical sequence in planning and controlling capital expenditures is to begin with identifying capital addition projects and other capital needs.

Choice 'a' is incorrect. Analyzing capital addition proposals omits other capital needs.

Choice 'b' is incorrect. Analyzing and evaluating all promising alternatives is beyond the scope of planning and controlling capital expenditures.

Choice 'd' is incorrect. Developing capital budgets is the same as planning and controlling capital expenditures.


by Zena at Jan 24, 2025, 05:59 PM

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Dottie
15 days ago
Ah, the joys of partnership law. I'm just hoping I don't have to deal with any 'apparent authority' issues in my future business ventures. Option D sounds like the safest bet here.
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Shawn
16 days ago
Haha, if only we could just randomly pick answers and get them right! But in this case, I think D is the way to go. Gotta stick to the partnership agreement, you know?
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Kerry
20 days ago
C is an interesting choice, but I don't believe it's the correct answer here. Submitting a claim to arbitration doesn't seem directly related to the question of apparent authority.
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Chau
24 days ago
Option B seems tricky, but I don't think that's the right answer. The third parties need to be aware of the formal resolution in order for it to effectively limit the partner's authority.
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Olene
1 days ago
A) Will be effectively limited by a formal resolution of the partners of which third parties are aware.
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Velda
7 days ago
D) Must be derived from the express powers and purposes contained in the partnership agreement.
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Leota
9 days ago
I agree, it's important for third parties to be aware of any formal resolutions to limit a partner's authority.
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Quentin
13 days ago
A) Will be effectively limited by a formal resolution of the partners of which third parties are aware.
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Dion
1 months ago
I think option D is the correct answer. The partner's authority must be derived from the partnership agreement, not just a formal resolution that third parties may not be aware of.
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Tamie
18 days ago
But what if the partnership agreement is not clear on the partner's authority? Would that limit their ability to bind the partnership?
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Dalene
1 months ago
I agree, option D makes sense. The authority of a partner should come from the partnership agreement.
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Casie
2 months ago
I'm not sure, but I think it's either A or D.
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Wynell
2 months ago
I agree with Leatha, the authority of a partner must come from the partnership agreement.
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Leatha
2 months ago
I think the answer is D.
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