With Regard to Liability of Partners, Which of the Following

question 109

Multiple Choice

With regard to liability of partners, which of the following is true?

• A) A limited partner has unlimited liability beyond the amount of his initial investment.
• B) A general partner could not be liable for losses suffered by a client because of misapplication of funds unless he knew about or took part in the misapplication.
• C) A general partner who retires from the partnership by giving notice of his leaving to the other partners could still be found liable for debt pursuant to a contract made when he was a partner.
• D) A general partner has limited liability for any loss suffered because of the negligent act (e.g., omission) of one of her partners.
• E) The partnership, and thus the partners, are liable for any loss suffered because of a tort committed by its employee outside the course of his employment.

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Definitions:

5-Year Loan

A type of loan that is scheduled to be repaid through payments over a period of five years.

Expected Inflation Rate

The anticipated rate at which the general level of prices for goods and services will rise over a period, affecting purchasing power.

Consumption Sector

A segment of the economy focused on the purchasing and use of goods and services by individuals and households.

Production Sector

The segment of the economy concerned with the production of goods and services, including agriculture, manufacturing, and construction.