Shawnequa Is a Partner of Cost Hydrohut LLP,an Accounting Limited

question 38

Essay

Shawnequa is a partner of Cost Hydrohut LLP,an accounting limited liability partnership.One of Shawnequa's partners negligently audits a client,with the result that a bank that relied on the client's audited financial statements suffers damages when the client fails to repay the loan.The bank sues Cost Hydrohut,but its assets are insufficient to pay the entire damages.Will the bank be able to collect the remaining damages from Shawnequa's personal assets?

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Definitions:

Accounts Receivable

Represents the money due to a company for goods or services that have been delivered or used but not yet paid for by customers.

DSO

DSO (Days Sales Outstanding) is a financial metric that calculates the average number of days it takes for a company to collect payments after a sale has been made.

Aging Schedule

An accounting table that shows the breakdown of receivables by age, helping manage and collect debts.

Sales Fluctuate

Variations or changes in sales volume over a specified period due to factors such as market demand, seasonality, or economic conditions.