Asked by
Danah Mongan
on Nov 23, 2024Verified
Harry, Clyde, and Pete carried on business in partnership as hardware merchants. Clyde, who did most of the purchasing of stock for the partnership, would occasionally purchase (using his own money) an extra quantity of some items that could readily be sold to consumers. He would use the truck owned by the business on the weekends to travel to his cottage where he would sell the items to cottage owners in the area of his own cottage. Harry and Pete were unaware of Clyde's actions, as Clyde had not revealed his weekend business activity to either Harry or Pete. Clyde's only liability to Harry and Pete is for expenses for his use of the truck.
Liability
Refers to the state of being legally responsible for something, typically a debt or obligation.
Weekend Business Activity
Commercial or professional transactions conducted during Saturday and Sunday.
Truck Expenses
Costs associated with operating and maintaining a truck, including fuel, repairs, maintenance, and insurance.
- Analyze how actions performed by partners affect the partnership's financial obligations and liabilities.
Verified Answer
AZ
Learning Objectives
- Analyze how actions performed by partners affect the partnership's financial obligations and liabilities.
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