When a new partner is admitted into the partnership by investment, the following take place except O Total assets and total partners' equity will decrease, unlike admission by purchase of interest. O Investment of non-cash assets must be recorded at current or fair market value. O. It is a transaction between the partnership and the incoming partner O. It involves the investment of assets by new partner into the partnership

When a new partner is admitted into the partnership by investment, the following take place except O Total assets and total partners' equity will decrease, unlike admission by purchase of interest. O Investment of non-cash assets must be recorded at current or fair market value. O. It is a transaction between the partnership and the incoming partner O. It involves the investment of assets by new partner into the partnership

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 5BCRQ

See similar textbooks

Similar questions

When a partnership dissolves, the first step in the dissolution process is to ________. A. allocate the gain or loss on sale based on income sharing ratio B. pay off liabilities C. sell noncash assets D. divide the remaining cash among the partners
When a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income sharing ratio. Why?
When a partnership dissolves, the last step in the dissolution process is to ________. A. allocate the gain or loss on sale based on income sharing ratio B. pay off liabilities C. sell noncash assets D. divide the remaining cash among the partners
Any assets invested by a particular partner in a partnership ________. A. do not become a partnership asset but instead remain with the partner B. can be used only by the investing partner C. become the property of all the partners D. are the basis for all profit sharing
How does a newly formed partnership handle the contribution of previously depreciated assets? A. continues the depreciation life as if the owner had not changed B. starts over, using the contributed value as the new cost basis C. shortens the useful life of the asset per the partnership agreement D. does not depreciate the contributed asset
What type of assets may a partner not contribute to a partnership? A. accounts receivable B. furniture C. equipment D. personal credit cards
A partnership ________. A. has one owner B. can issue stock C. pays taxes on partnership income D. can have more than one general partner
Which of the following is a disadvantage of the partnership form of organization? A. limited life B. no taxation at the partnership level C. flexibility in business operations D. combining of financial resources
When a partnership liquidates, do partners get paid first or do creditors get paid first?
Which one of the following would not be considered in the development of a partnership agreement? A. profit and loss levels B. processing disputes C. stock options D. asset contributions