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What is a principal advantage of a written partnership deed compared to an oral agreement?

Answer and explanation

Correct answer: Serves as documentary evidence in disputes

A written deed provides documentary proof of the partners’ agreed terms and can be produced in court or shown to third parties, whereas oral agreements are hard to prove and remember. Option C (automatic bank loan) is incorrect because lenders evaluate creditworthiness and security; a deed alone does not guarantee loan approval. Exam tip: always get the deed signed, dated and properly stamped/registered and keep copies for evidence.

Related tags

Partnership AccountsPartnership DeedOral Vs WrittenEvidenceAccounting BasicsPartnership DeedPartnership Accounts Basic ConceptsAccountancy

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