You Form a Partnership with Your Best Friend

question 41

Multiple Choice

You form a partnership with your best friend.You have contributed 65% of the capital and can claim 65% of the net income.At the end of the first year,you discover that your partner has run up $40,000 in debt using the business' credit card.The maximum you could be liable for is:

• A)$0.
• B)$40,000.
• C)$20,000.
• D)$26,000.

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Definitions:

Freight

The transportation of goods by truck, train, ship, or aircraft, often involving large quantities of products over distances.

Cash Discount

A reduction in the price of goods or services offered by the seller to the buyer for immediate payment or payment within a specified time frame.

Partial Payment

A payment made that is less than the total amount due for a bill or debt.

Pet Food

Specially formulated food intended for consumption by pets, such as dogs and cats, designed to meet their nutritional needs.