When Admitting a New Partner by Investment, a Bonus to Old

question 60

Multiple Choice

When admitting a new partner by investment, a bonus to old partners

• A) is usually unjustified because carrying amounts clearly reflect partnership net worth.
• B) is sometimes justified because goodwill may exist and it is not reflected in the accounts.
• C) results if the debit to cash is less than the new partner's capital credit.
• D) results if the debit to cash is equal to the new partner's capital credit.

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Sensory Details

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