Ralph,a partner,doing partnership along with Gilbert and Vicky,during the course of the partnership,pays a sum of $4,000 to one of the suppliers out of his personal account.The partnership firm will have to pay back this amount to Ralph as per the partner's right to _____.
A)profits and losses
B)indemnification
C)compensation
D)management
E)derivative action

Question

Quizplus · Accepted Answer

Ralph paid the sum of money to the supplier on behalf of the partnership firm, which means he incurred an expense for the partnership. Therefore, he has the right to be reimbursed from the partnership for the amount he paid out of his personal account. This right is called indemnification.

Ralph,a Partner,doing Partnership Along with Gilbert and Vicky,during the Course