The Implied Authority of Each Partner to Bind the Other

question 3

Multiple Choice

The implied authority of each partner to bind the other partners in the partnership does not include authority to:

• A)hire employees.
• B)buy and sell trading stock.
• C)give a guarantee on behalf of the partnership.
• D)write cheques on behalf of the partnership.

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Definitions:

Probable Loss

A loss in financial terms that is likely to occur based on current information and judgment.

Reasonably Possible

A term used in accounting to describe a condition that could occur, affecting financial decisions or disclosures, based on current knowledge and events.

Note Disclosure

Additional information provided in a company's financial statements, explaining the numbers presented in the statements for clarity and completeness.

Contingent Liability

A potential financial obligation that may arise in the future, depending on the outcome of a certain event.