Shaun and Rick Are Partners

question 6

Multiple Choice

Shaun and Rick are partners. Shaun has a capital balance of $10,000 and Rick has a capital balance of $8,000. Edwin invests a building with a current market value of $6,000 to acquire an interest in the new partnership. Which of the following is true of the effect of the transaction on the balance sheet? (Assume no bonus to any partner.)

• A)Both assets and equity will increase by $6,000.
• B)Both assets and liabilities will decrease by $6,000.
• C)Both assets and equity will decrease by $6,000.
• D)Both assets and liabilities will increase by $6,000.

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Definitions:

Acute Stress

This is a short-term physiological response to an immediate perceived threat, challenge, or scare.

Stress Response

The body's reaction to any demand or threat, activating physiological changes to face the challenge.

Emotion of Anger

A strong feeling of annoyance, displeasure, or hostility.

Fight

A confrontation or struggle between individuals or groups, often involving physical violence or arguments.