Final Review Notes

Question 1

Terms of a merchants firm offer

Answer 1

If in writing and guaranteed to stay open for an unspecified amount of time, firm offer cannot be revoked if w/in a reasonable amount of time (usually 3 months)

Question 2

Negotiable instruments must be…

Answer 2

Payable on demand or w/in a specific period of time.

Question 3

Liability if a limited partner contracts as a general partner

Answer 3

Limited partner is liable as a general partner only to the creditor it transacted with.

Question 4

Gains on 1245 assets

Answer 4

Recognized as ordinary to extent of accumulated depreciation, remainder of gain is capital