If Goodwill Is Suggested by the Consideration Paid to a Withdrawing

question 44

Multiple Choice

If goodwill is suggested by the consideration paid to a withdrawing partner,

• A)only the goodwill traceable to the withdrawing partner may be recorded.
• B)goodwill traceable to the original partnership is allocated among the partners according to their respective interests in capital.
• C)the goodwill traceable to the withdrawing partner represents the difference between the partner's capital balance and the consideration he or she receives.
• D)none of the above.

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Definitions:

Carbon Tetrachloride

A colorless liquid with the formula CCl4, historically used as a cleaning agent, fire extinguisher, and refrigerant, now recognized as a carcinogen.

Pyridine

A basic heterocyclic organic compound with the formula C5H5N, featuring a ring structure similar to benzene but with one methine group (\(CH\)) replaced by a nitrogen atom.

Aromatic

Compounds that contain a planar ring of atoms that are stabilized by a delocalization of pi electrons according to Huckel's rule.

Antiaromatic

Antiaromatic compounds are cyclic, planar molecules that possess 4n π electrons (where n is an integer) and are destabilized due to their electronic structure, contradicting the stability seen in aromatic compounds.