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.

---

Definitions:

Tax Purposes

The reason or objective behind the implementation of taxes or certain tax guidelines, often related to income, business expenses, and investments.

Capital Gain

The profit earned from the sale of assets like stocks, bonds, or real estate, which exceeds the purchase price.

Book Value

For a company, the value of equity, equal to total assets minus total liabilities. Book value can be stated in total or per share. For an asset, book value is the net of original cost minus accumulated depreciation, and is generally referred to as net book value.

Original Cost

The initial monetary value of an asset or investment at the time of its acquisition.