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

1. Introduction to Accounting

Business Organization

Financial Accounting

1. Introduction to Accounting

Business Organization

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Multiple Choice

If E and F are business partners in a partnership, which of the following statements is correct regarding their liability for the partnership's debts?

Only E is liable for the partnership's debts, while F is not.

Both E and F have liability limited to their capital contributions.

Both E and F have unlimited personal liability for the partnership's debts.

Neither E nor F is liable for the partnership's debts.

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Verified step by step guidance

Step 1: Understand the concept of a partnership. A partnership is a business structure where two or more individuals share ownership, profits, and liabilities. In a general partnership, all partners are personally liable for the debts of the business.

Step 2: Clarify the concept of 'unlimited personal liability.' This means that each partner is responsible for the partnership's debts, not just up to their capital contributions, but potentially using their personal assets if the business cannot cover its obligations.

Step 3: Analyze the options provided in the problem. Option 1 states that only E is liable, which contradicts the principle of shared liability in a partnership. Option 2 suggests liability is limited to capital contributions, which applies to limited partnerships but not general partnerships. Option 4 states neither partner is liable, which is incorrect for a general partnership.

Step 4: Focus on the correct statement: 'Both E and F have unlimited personal liability for the partnership's debts.' This aligns with the legal framework of a general partnership, where all partners share equal responsibility for the business's obligations.

Step 5: Conclude that in a general partnership, both E and F are personally liable for the partnership's debts, and their liability is not limited to their capital contributions but extends to their personal assets if necessary.