John, Nathan, and Julio Form JNJ, LLC with Equal Capital

question 39

Multiple Choice

John, Nathan, and Julio form JNJ, LLC with equal capital investment each.On his way to a business meeting with clients of JNJ, Nathan accidentally injures Jessica in a car accident.Which of the following is true in this scenario?

• A)Jessica can claim damages from JNJ, LLC as she was injured in the ordinary course of business.
• B)Jessica can only claim damages from Nathan and not from JNJ, LLC.
• C)Jessica can choose to claim damages from any one of the three.
• D)John, Nathan, and Julio have equal personal liability to Jessica's injuries.

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Definitions:

Accounting Equation

The basic formula of double-entry accounting: Assets equal Liabilities plus Equity.

Accounting Equation

The fundamental equation of double-entry bookkeeping: Assets = Liabilities + Equity, representing the financial position of a business.

Liabilities

Financial obligations or debts owed by a business to another entity, payable in the future.

Owner's Equity

The residual interest or ownership claim in the assets of an entity after deducting its liabilities.