A partner who contributes capital but does not participate in the day-to-day running of the business is

Assessment: WAEC SSCE - Financial Accounting - 2020 (Objective) Subject: Financial Accounting

Question 1 Report

A partner who contributes capital but does not participate in the day-to-day running of the business is 

Answer Details
A partner who contributes capital but does not participate in the day-to-day running of the business is called a "sleeping partner." Sleeping partners are also known as silent partners or dormant partners. Unlike active partners, sleeping partners do not take an active role in the management of the business. Instead, they provide financial support by contributing capital to the partnership. In return, they receive a share of the profits in accordance with the partnership agreement. Sleeping partners may be involved in the decision-making process of the business, but they are not involved in the day-to-day running of the business. They are typically passive investors who provide financial support to the business without actively participating in its management. Therefore, the correct answer is "a sleeping partner."

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