Julie Contributes as Part of Her Initial Investment Accounts Receivable

question 23

Multiple Choice

Julie contributes as part of her initial investment accounts receivable with an allowance for doubtful accounts. Which of the following reflects a proper treatment?

• A) The balance of the accounts receivable account should be recorded on the books of the partnership at its net realizable value.
• B) The allowance account may be set up on the books of the partnership because it relates to the existing accounts that are being contributed.
• C) The allowance account should not be carried onto the books of the partnership.
• D) The accounts receivable and allowance should not be recorded on the books of the partnership because a partner must invest cash in the business.

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