When a Partner Retires and Withdraws Assets in Excess of His

question 6

Multiple Choice

When a partner retires and withdraws assets in excess of his book value, the remaining partners absorb the excess:

• A) equally.
• B) in their profit-sharing ratio.
• C) based on their average capital balances.
• D) based on their ending capital balances.

---

Definitions:

Statement of Stockholders' Equity

A financial document that shows changes in the value of a company's equity over a period, including shares issued, dividends, and earnings.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits.

Balance Sheet

A report detailing a business's assets, debts, and owners' equity at a particular moment, offering an overview of its financial health.

Accounting Cycle

The process of recording, classifying, summarizing, and reporting a company's financial transactions through the accounting period.