Dominic and Morgan Are Partners

question 37

Multiple Choice

Dominic and Morgan are partners. Dominic has a capital balance of $350,000 and Morgan has a capital balance of $245,000. Morgan sells $105,000 of his ownership to Lance. Which of the following is true of the items in balance sheet?

• A)The total equity decreases by $105,000.
• B)The total equity remains unchanged.
• C)Assets will decrease by $105,000.
• D)Assets will increase by $105,000.

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Definitions:

Law

A system of rules created and enforced through social or governmental institutions to regulate behavior.

Medical Practices

Medical practices refer to the professional businesses or establishments operated by one or more physicians or medical professionals to provide healthcare services to patients.

Firms

Businesses or companies engaged in commercial, industrial, or professional activities.

Individual Assets

Assets that are identifiable and separate, such as machinery, buildings, or patents, and can be owned and controlled by an entity.