Fundamental Accounting Principles
Fundamental Accounting Principles
23rd Edition
ISBN: 9781259536359
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 12, Problem 1DQ
To determine

Concept Introduction:

Partnership: Partnership is one of the types of business origination. Under the partnership, two or more individuals agree to form a business together and share losses and profits in the predetermined ratio.

The Duration of Partnership: A partnership may be formed for a particular period; in such case, the duration of the partnership is limited to that period. But if the duration of the partnership is not mentioned in the partnership agreement, then the partnership is considered as Partnership at will. The duration of the partnership at will depend upon the partner’s will, they can continue the partnership until the desire and dissolve the partnership when they want.

To determine: The duration of the partnership if the partnership duration is not mentioned in the partnership contract.

Expert Solution & Answer
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Explanation of Solution

Explanation:

If the partnership contract specifies the duration of the partnership, in such case the duration of the partnership is limited to that period. But if the duration of the partnership is not mentioned in the partnership agreement, then the partnership is considered as Partnership at will. The duration of the partnership at will depend upon the partner’s will, they can continue the partnership until the desire and dissolve the partnership when they want.

Hence, the partnership duration is not mentioned in the partnership contract, then the partnership can be ended by the partnership at any time at their will.

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