- 10 Marks
BCL – L1 – Q50 – Alternative forms and constitutions of business organisations
Advise why a firm should bear the cost of a partner's expense for a company car tyre.
Question
Kweku is a partner of an Accounting Firm. The firm’s office is in Kumasi. In May 2019, Kweku was assigned an approved accounting duty outside Kumasi with the use of the Firm’s car. During the journey the car had a burst tyre. The driver of the car for unexplained reasons had no spare tyre on the car. He, therefore, recommended the purchase of a brand-new tyre which Kweku did with his personal money. He obtained a receipt in the name of the Firm. Kweku sought for refund of his money amounting to GH₵1,280 for the tyres bought. The Managing Partner refused the refund saying it was the sole responsibility for Kweku to bear the expenditure.
Required:
(a) Advise the Manager as to why the Firm should bear the full or part of the cost and not only Kweku.
(b) Advise Kweku why it is not the sole responsibility of the firm to bear the cost.
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