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When a New Partner Is Admitted into a Partnership and the New

question 68

Multiple Choice

When a new partner is admitted into a partnership and the new partner receives a capital credit greater than the tangible assets contributed,which of the following explains the difference?
I.The old partners' goodwill is being recognized.
II.The new partner's goodwill is being recognized.


Definitions:

Nonprofits

Organizations that operate for purposes other than making a profit, often focused on charitable, educational, or social causes.

For-Profits

Organizations or businesses that operate with the primary goal of making profits for their owners or shareholders.

Government Agencies

Public organizations at the local, state, or federal level that administer and enforce laws, regulations, and policies.

Corporate Level

Pertains to the highest strategic tier of business decisions and actions that affect the entire organization.

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