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WAEC Financial Accounting 2012 Question 22

Question 22

Partnership Accounts

A partner who only makes capital contribution but does not take part in the management of the partnership business is a/an

  1. A.ordinary partner.
  2. B.limited partner.
  3. C.dormant partner.
  4. D.nominal partner.
Show the answer and explanation

Answer: C (dormant partner.)

Explanation

A dormant (sleeping) partner puts in capital but takes no part in running the business. A nominal partner only lends his name and usually puts in no capital.