The Partner Who Can Lose Only What He or She

question 7

Multiple Choice

The partner who can lose only what he or she has invested in a business is the

• A) general partner.
• B) sole trader.
• C) manager.
• D) employee.
• E) limited partner.

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Definitions:

Preparing Closing Entries

The procedure of transferring all income statement balances to permanent accounts at the end of an accounting period to prepare for the next period.

Fiscal Year

A one-year period that companies use for financial reporting and budgeting, which does not necessarily align with the calendar year.

Accounting Period

A specific period of time used by businesses to calculate their financial results and prepare financial statements, such as a month, quarter, or year.

Calendar Year

A period of one year that begins on January 1 and ends on December 31, used as an accounting period by many businesses.