Allan and Ralph Are Partners

question 58

Multiple Choice

Allan and Ralph are partners.Allan has a capital balance of $89,000 and Ralph has a capital balance of $73,000.Carol invested $61,000 to acquire an ownership interest of $50,000.Which of the following is true of the impact of the transaction on the balance sheet?

• A)Assets will increase and equity will decrease.
• B)Both assets and equity will increase.
• C)Assets will increase and the equity will remain unchanged.
• D)Asset increases and the equity will remain unchanged.

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Definitions:

Poor Communication

The ineffective exchange of information, which can lead to misunderstandings, errors, and conflict in any context, including personal, professional, and legal settings.

Case Damage

A term that refers to the harm or losses suffered as a result of the actions or events at the center of a legal case, often quantified in financial terms for compensation.

Client Relationship

The professional and ongoing association between a service provider and their client, often governed by an agreement and characterized by trust and confidentiality.

Legal Professionals

Individuals professionally qualified to offer advice, conduct lawsuits, or represent clients in legal matters, such as lawyers and judges.