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Accounting Principles Exercises E12.1 (LO 1) Mark Rensing has prepared the following list of statements about partnerships. Identify characteristics of partnership. 1. A partnership is an association of three or more persons to carry on as co- owners of a business for profit. 2. The legal requirements for forming a partnership can be quite burdensome. 3. A partnership is not an entity for financial reporting purposes. 4. The net income of a partnership is taxed as a separate entity 5. The act of any partner is binding on all other partners, even when partners perform business acts beyond the scope of their authority. 4:28 iii Aa A 10 3. The act UI any paiulelis binding on all other partners, even when partners perform business acts beyond the scope of their authority. 6. Each partner is personally and individually liable for all partnership liabilities. 7. When a partnership is dissolved, the assets legally revert to the original contributor 8. In a limited partnership, one or more partners have unlimited liability and one or more partners have limited liability for the debts of the firm. 9. Mutual agency is a major advantage of the partnership form of business. Instructions Identify each statement as true or false. If false, indicate how to correct the statement. 12-32 of 1404