passwella.
Menu

JAMB Principles of Accounts 1995 Question 33

Question 33

Partnership Accounts

Which of the following is a strong feature of partnership?

  1. A.The life of the partnership is generally assumed to be indefinite
  2. B.The owners are liable personally for all debts of the business
  3. C.The transfer of ownership interest is frequent and easy to accomplish
  4. D.The partnership is complex to form because of many legal and reporting requirements.
Show the answer and explanation

Answer: B (The owners are liable personally for all debts of the business)

Explanation

In an ordinary partnership the partners have unlimited liability: they are personally liable for all the firm's debts.