When a Partner Makes an Advance or Loan to the Partnership

question 12

Multiple Choice

When a partner makes an advance or loan to the partnership, how many of these statements are true?
He/she is entitled to interest at the rate of 7% p.a. unless there is an agreement to the contrary.
The amount loaned is added to the partners equity account balance.
Interest on the loan is regarded as an expense of the partnership and appears in the income statement.

• A) 0
• B) 1
• C) 2
• D) 3

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Definitions:

Environmental Scanning

The process of collecting, analyzing, and using information about trends, events, and relationships in an organization's external environment.

Strategic Planning

The process of defining a direction for an organization by setting goals, determining actions to achieve those goals, and mobilizing resources to execute the actions.

Global Landscape

Describes the international context or environment in which businesses operate, including economic, political, and cultural dynamics.

External Labour Supply

The availability of potential employees in the job market outside an organization that can be considered for hiring to fulfill HR demand.