When a New Person Purchases the Partnership Interest of an Existing

question 39

Multiple Choice

When a new person purchases the partnership interest of an existing partner,which of the following is TRUE?

• A)The newly admitted partner will assume the same capital balance of the old partner regardless of the amount paid.
• B)The partnership will record either a gain or a loss if the amount paid is higher or lower than the existing partner's capital account balance.
• C)The amount paid for the partnership interest is recorded on the partnership books.
• D)The purchase price is determined by the balance in the existing partner's capital account.

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Definitions:

Employee Motivation

The degree of enthusiasm, dedication, and inventiveness that employees of a firm apply to their roles.

Interdependent Tasks

Tasks that require coordination and collaboration among team members to be completed effectively.

Reward System

A framework within an organization designed to recognize and reward employee performance and contribute to motivation and satisfaction.

Maximum Efficiency

The optimal use of resources to achieve the highest possible output or productivity with the least amount of input or waste.