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:

AWill be effectively limited by a formal resolution of the partners of which third parties are aware.

BWill be effectively limited by a formal resolution of the partners of which third parties are unaware.

CWould permit a partner to submit a claim against the partnership to arbitration.

DMust be derived from the express powers and purposes contained in the partnership agreement.

Show Suggested Answer

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

Limited Time Offer

25%

Off

Get Premium CPA-Business Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Dion

6 days 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.

upvoted 0 times

...