Kent and Davis are partners in operating a store. Without consulting Kent, Davis enters into a contract

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Kent and Davis are partners in operating a store. Without consulting Kent, Davis enters into a contract to purchase merchandise for the store. Kent contends that he did not authorize the order and refuses to pay for it. The vendor sues the partners for the contract price of the merchandise.
(a) Must the partnership pay for the merchandise? Why?
(b) Does your answer differ if Kent and Davis are partners in a public accounting firm? Explain.

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Fundamental Accounting Principles

ISBN: 978-0078110870

20th Edition

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

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