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?

Answer 1

Mutual agency as it relates to the context of Partnership, is the right of all the partners to represent the normal operations of the company’s business and the authority for them to connect it to mutual contracts/agreements. Usually this authority is given to a business owner/partner. Each partner acts as individuals and has this authority.

Articles of partnership is a contract among all the partners to pool capital, labor, share in profit/loss and liability. These articles is treated as a rule book for limited partnerships which mentions the conditions based on which the partners enter into the partnership.

In a partnership, the Residual Profit is the amount of profit remaining after entitling a proportion of profit to all the partners as per the agreement. These proportions are known as the appropriations of profit.

An Accounting System is the system used to manage a business' income, expenses and other financial activities. An accounting system helps to keep track of different types of financial transactions and helps to generate various reports that assist management or other stakeholders in decision-making process.