Question

What is mutual agency as it relates to a partnership?

What is Articles of Partnership?

What is residual profit as it relates to a partnership?

What is an accounting system?

What is meant by "limited life" as it relates to partnerships?

Answer 1

Mutual agency- Mutual agency refers to the legal relationship between partners in the partnership. This relationship bind them together and gives rights, authority and power to take decisions that is better for the company.

Articles of Partnership- Articles of Partnership refers to the contract between the partners of company to place there labour,capital and skills in the company and to share the profits between them.

Residual profits- In partnership, Residual profits are the profit which is left after all the expenses etc. Residual profits is shared among partners in the decided profit and loss ratio.

Accounting system- Accounting system refers to the system which allows to record, classifying,summarise the transactions and to manage all the expenses, revenue and other financial activities of the company.

Limited life- In partnership, limited life refers to the limited period of life of the partnership that is decided on the agreement. If it is not decided on agreement, the death of any partners, inability, bankruptcy etc will terminates the partnership. Partnership is limited upto some period of time.