Multiple choice

If a partner derives profit from the use of property of the firm, he is

  1. entitled to keep the whole profit himself

  2. entitled to account for that profit and pay it to the firm

  3. entitled to do as he wishes

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

  If a partner has earned any profit from the use of property of the firm, the partner is entitled to account for that profit and pay it to the firm, and not keep it himself, subject to contract between partners. As all the partners are agents and principal and for the act of a partner, all the partners are responsible. The profit earned by a partner from the property of firm must be accounted for and distributed in the partners in the agreed ratio that is the main reason that it is right answer here.

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