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A clause restricting personal expenses in the deed controls what?

Answer and explanation

Correct answer: Use of the firm’s money

The governing concept is separation between partnership funds and a partner’s private expenditure. A clause restricting personal expenses requires firm money to be used for legitimate business purposes and prevents a partner from treating the firm’s bank balance or cash as personal money. It improves internal control, accountability, and protection of the other partners’ interests. Therefore, option A is correct. The clause does not control a customer’s income, the profit earned by a bank, or the timing of market activity. Those matters belong to customers, banking institutions, or commercial decision-making and are outside this specific partnership-deed restriction.

Related tags

Personal ExpensesFirm MoneyPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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