Question

A devotes full time and B devotes one-half time to their partnership. If the partnership agreement is silent concerning the division of net income, A will receive a $20,000 share of a net income of $30,000.
A. True
B. False

Answer 1

Answer:

False

Explanation:

A partnership is when 2 parties come together to invest in a business.

Profit sharing from the business is usually based on the percentage invested by the partners.

For example if A invested 20% and B invested 80%, B will receive a higher share.

So in this case the amount they will be entitled to is a function of their investment unless otherwise stated in the agreement.

Since the agreement is silent on this their contribution will be used as the basis for sharing and not responsiblity in the business.