Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 6 - No. 5)
Which of the following statements is true regarding the relationship between a partnership and its partners' personal assets?
Partners' personal assets are always protected from business debts.
Partners' personal assets are only at risk if the partnership has unlimited liability.
Partners' personal assets are always at risk for business debts, regardless of the partnership's liability structure.
Partners' personal assets are only at risk if the partnership agreement specifies it.
Explanation
Partners' personal assets are at risk when the partnership has unlimited liability.
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