Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

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Multiple Choice

If one owner of a partnership makes a bad decision that results in the business being sued, then:

The partners are protected by limited liability and cannot be sued personally.

All partners may be personally liable for the debts and obligations arising from the lawsuit.

Only the partner who made the bad decision is liable for the lawsuit.

The partnership itself is dissolved immediately.

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Verified step by step guidance

Understand the concept of partnership liability: In a partnership, all partners share the responsibility for the business's debts and obligations unless the partnership is structured as a limited liability partnership (LLP).

Review the principle of joint and several liability: In a general partnership, partners are jointly and severally liable, meaning each partner can be held personally responsible for the full amount of the partnership's debts and obligations.

Analyze the scenario: If one partner makes a bad decision that leads to a lawsuit, the liability typically extends to all partners in a general partnership, as they share responsibility for the actions taken on behalf of the business.

Clarify the incorrect options: Limited liability protection applies only to specific types of partnerships, such as LLPs or corporations, not general partnerships. Additionally, the partnership is not automatically dissolved due to a lawsuit unless specific dissolution terms are triggered.

Conclude the correct answer: In a general partnership, all partners may be personally liable for the debts and obligations arising from the lawsuit, as per the principle of joint and several liability.