Cherryhill and Hace Had Been Partners for Several Years, and They

question 23

Multiple Choice

Cherryhill and Hace had been partners for several years, and they decided to admit Quincy to the partnership.The accountant for the partnership believed that the dissolved partnership and the newly formed partnership were two separate entities.What method would the accountant have used for recording the admission of Quincy to the partnership?

• A) The bonus method.
• B) The equity method.
• C) The goodwill method.
• D) The proportionate method.
• E) The cost method.

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Definitions:

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Net Worth

The total value of an individual’s or entity’s assets minus liabilities.

Medicaid

Medicaid is a public health insurance program in the United States that provides health coverage to eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities.

Chebysheff's Theorem

A theorem that provides a minimum proportion of observations that lie within a specified number of standard deviations from the mean, applicable to all distributions.