Which Statement Is Correct Regarding the Liability of a Partner

question 16

Multiple Choice

Which statement is correct regarding the liability of a partner for a mistake?

• A) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is not held personally liable for the mistake.
• B) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent of his or her capital contribution.
• C) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent that he or she shares in profits.
• D) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held personally liable for the mistake, but only to the extent that he or she shares in losses.
• E) A partner who makes an honest mistake in fulfilling his or her responsibilities to the partnership is held fully personally liable for the mistake.

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Definitions:

Keyword Method

A mnemonic device that involves using keywords and mental imagery to associate verbal material.

Acrostic

A composition such as a poem or word puzzle where specific letters from each line create a separate word or phrase.

Party

A social gathering of invited guests, typically involving eating, drinking, and entertainment.

Levels of Processing

Refers to a framework in cognitive psychology suggesting that the depth of mental processing affects memory retention, with deeper processing leading to better recall.