Answered: Distinguish between the liability of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Distinguish between the liability of incoming partner for debts arising before his admission and those arising after admission.

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A partnership is a legally enforceable agreement between two or more people to manage and operate a business while sharing profits. Partnerships can come in a variety of shapes and sizes. In a partnership, for example, partners share equal liability and earnings, although in other organisations, partners may have limited liability. There's also the "invisible partner," who isn't involved in the company's day-to-day operations.

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