Answered: In the context of the various forms of…

Business

Accounting

In the context of the various forms of business ownership, discuss the two basic types of partnerships.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 4MC: Mutual agency is defined as: A. a mutual agreement B. the right of all partners to represent the...

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Question

In the context of the various forms of business ownership, discuss the two basic types of partnerships.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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