With Regard to Liability of Partners, Which of the Following

question 47

Multiple Choice

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

• A) A general partner has limited liability for any loss suffered because of the negligent act (e.g. omission) of one of his partners.
• 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) 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.
• E) A limited partner has unlimited liability beyond the amount of his initial investment.

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Definitions:

Office Equipment

The tools, devices, or machinery used in an office setting to assist with day-to-day operations, including computers, printers, and furniture.

Credit Entry

An accounting entry that increases a liability or equity account, or decreases an asset or expense account, recorded on the right side of an account.

Asset Accounts

Accounts on a balance sheet that represent the resources owned by a company, which have value and can provide future benefits.

Common Stock

Equity ownership in a corporation, entitling holders to vote at shareholder meetings and to receive dividends.