7,8

QUESTION 7 In a partnership, mutual agency means that A) the addition of a new partner does not dissolve the old partnership; there is a mutual exchange of ownership with the existing partners B) every partner must contribute the same amount of capital C) the agency problem between the principal and agents are mutual and are neutralized OD) any partner can bind the business to a contract within the scope of its regular business operations QUESTION 8 A firm has two partners: Jim and Bill. Jim owns 60% of the partnership and Bill owns 40%. In which of the following transactions will the partnership be held responsible for an individual partners' actions? OA) Jim signs a contract as a guarantor for Bill's personal loan. B) Jim buys a laptop on credit for personal use. C) Bill signs a contract to buy furniture for official use in the partnership. D) Bill defaults on payment of his personal credit card bill. ARCTICA