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13 October, 03:50

Under general circumstances, debt is allocated from the partnership to each partner in the following manner: A. Recourse - profit sharing ratios; nonrecourse - profit sharing ratios B. Recourse - capital ratios; nonrecourse - capital ratios C. Recourse - to partners with the ultimate responsibility for paying the debt; nonrecourse - profit sharing ratios D. Recourse - profit sharing ratios; nonrecourse - to partners with the ultimate responsibility for paying the debt

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  1. 13 October, 06:28
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    Recourse - to partners with the ultimate responsibility for paying the debt; nonrecourse - profit sharing ratios

    Explanation:

    A partnership is defined as an agreement where two or more parties decide tooversee that activities of a business and share the profit and loss realised. It is common for professionals such as doctors and lawyers to form partnerships.

    Recourse debt is defined as the portion of loss realised by the business that is borne by each of the partners. Partners with ultimate responsibility bears the debt.

    However nonrecourse items such as loans are shared among partners on the basis of profit sharing ratio
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