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Why is the right to inspect the firm's books included in the partnership deed?

Answer and explanation

Correct answer: To allow each partner to examine the firm's accounts and records and ensure transparency

The right is included so each partner can examine the firm's accounts, transactions and records. This ensures transparency, accountability and helps detect errors or fraud early. Option B is a tempting distractor — inspection can reveal theft but its primary purpose is to grant partners access to information, not specifically to prevent theft. Options C and D are incorrect because tax exemptions or bank-loan facilitation are not the main reasons for recording inspection rights in the deed. Exam tip: For deed-related questions, prefer answers about partners’ rights, transparency and internal control over answers that suggest external financial benefits.

Related tags

Partnership DeedInspection Of BooksPartners RightsPartnership AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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