pay his private debts first
if there is any surplus it can be used to pay firm's liabilities
Both A and B
None of the above
Answer is Right!
Answer is Wrong!
The correct answer is: D. None of the above
A partner’s private property cannot be used to pay his private debts first. The partner’s private property is not liable for the debts of the partnership. If the partnership is unable to pay its debts, the partners’ personal assets may be at risk, but only to the extent of their investment in the partnership.
If there is any surplus after the partnership’s debts have been paid, it can be distributed to the partners according to their profit-sharing agreement.
Here is a brief explanation of each option:
- Option A: A partner’s private property should be used to pay his private debts first. This is incorrect because a partner’s private property is not liable for the debts of the partnership.
- Option B: If there is any surplus it can be used to pay firm’s liabilities. This is incorrect because the surplus must first be distributed to the partners according to their profit-sharing agreement.
- Option C: Both A and B. This is incorrect because both options are incorrect.
- Option D: None of the above. This is the correct answer because a partner’s private property cannot be used to pay his private debts first, and the surplus must first be distributed to the partners according to their profit-sharing agreement.