If Goodwill Is Traceable to the Incoming Partner, the New

question 13

Multiple Choice

If goodwill is traceable to the incoming partner, the new partner's capital balance equals

• A)the fair market value of consideration paid by the incoming partner
• B)the book value of the older partnership divided by the existing partners' ownership percentage in the new partnership minus the book value of the old partnership.
• C)incoming partner's ownership percentage multiplied by the capital of the new partnership
• D)none of the above.

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Definitions:

Diathesis-Stress Perspective

A psychological theory that explains behavior as a result of predispositional vulnerabilities together with stress from life experiences.

Systems Theory

A theory proposing that multiple interacting factors generate all behaviour, and that the effects of these factors are bidirectional; that is, the influence of each factor on another changes the other factors, which in turn then influence the original factor. The overall effect of these influences is said to be greater than the sum of the influence of each of the factors.

Biopsychosocial Model

A holistic approach to health and illness that considers biological, psychological, and social factors.