nus is given to the old partners-
Chapter20: Corporations And Partnerships
Section: Chapter Questions
Problem 21DQ
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Question
Transcribed Image Text:Multiple Choice
Instruction: Encircle the letter of the corresponding correct answer.
1. When a new partner is admitted in an existing partnership either by purchase of
interest or by investment, which of the following statement is true?
a. the partnership book is required to be changed with a new one
b. bonus should be recorded
c. the partnership's non-cash assets should be adjusted to conform with their
fair market values
d. both requires to undergo the liquidation process
2. When bonus is given to the old partners-
a. old partners' capital accounts are credited
b. the bonus is divided based on P/L Ratio
new partners' capital account is debited
d. all of the above
C.
Transcribed Image Text:3. When the bonus formula indicates that there is bonus to be given to old partners-
a. the new partner's capital account will be credited
b. the new partner's capital account will be debited
C. the old partners' capital account will be credited
d. the old partners' capital account witl be debited
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