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What is the main benefit of including an audit clause in a partnership deed?

Answer and explanation

Correct answer: Checking of accounts becomes easier and more transparent

An audit clause ensures regular, impartial inspection of the partnership's books, helping detect errors or irregularities and increasing transparency. Hence making checking of accounts easier and more transparent is the correct benefit. Option B is incorrect because an audit does not automatically increase profits; it only verifies their accuracy. Options C and D are irrelevant — audits do not extinguish capital or waive loans. Exam tip: associate 'audit' with inspection and transparency to answer quickly.

Related tags

AuditAccountsPartnership-DeedPartnersFinancial-ControlsPartnership DeedPartnership Accounts Basic ConceptsAccountancy

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