When an Existing Partner Sells His Interest to Another Party

question 5

Multiple Choice

When an existing partner sells his interest to another party in a personal transaction ________.

• A) it is considered a transaction between the partnership and the new party
• B) the old partnership will continue functioning, since the partner is replaced by another party without diluting the old partnership
• C) the journal entry simply debits the withdrawing partner's capital account and credits the new partner's capital
• D) the equity and assets in the balance sheet always increase by the same amount

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Definitions:

Aldosterone

Adrenal hormone that encourages sodium reabsorption by the kidney; concentrates the urine.

Bowman's Capsule

A part of the nephron in the kidney that encloses the glomerulus and where filtration of blood plasma begins in the process of urine formation.

Glomerulus

Cluster of leaky capillaries enclosed by a Bowman’s capsule.

Distal Tubule

Region of a kidney tubule that connects to a collecting tubule.