If Goodwill Is Traceable Only to the Previous Partners

question 21

Multiple Choice

If goodwill is traceable only to the previous partners,

• A)the book value of the previous partnership plus the investment of the incoming partner will be greater than the fair market value of the partnership as suggested by the incoming partner's investment.
• B)the new partner's initial capital balance is equal to his or her investment in the partnership.
• C)existing assets of the previous partnership will never be revalued.
• D)none of the above.

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