It Is Possible That an Incoming Partner May Acquire an Interest

question 47

Multiple Choice

It is possible that an incoming partner may acquire an interest in the partnership at a price less than that indicated by the book value.This situation would suggest the existence of:

• A)​Write downs on recorded net assets
• B)​Recognition of loss by all partners
• C)​Increase in other partners net worth
• D)Decrease in other partners net worth​

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Definitions:

Disbursement Float

The time lag between when a payment is made by writing a check and when the funds are actually withdrawn from the payer's account.

Collection Float

The interval between depositing a check into a bank account and the moment the deposited funds are accessible.

Outstanding Cheques

Checks that have been written and issued but not yet cashed or cleared through the banking system.

On-line Retailing

Online Retailing is the selling of goods or services over the internet, where customers can shop from a variety of vendors at any time.