Dominic and Morgan Are Partners

question 119

Multiple Choice

Dominic and Morgan are partners.Dominic has a capital balance of $360,000 and Morgan has a capital balance of $225,000.Morgan sells $125,000 of his ownership to Lance.Which of the following is TRUE of the items in the balance sheet?

• A) The total equity decreases by $125,000.
• B) The total equity remains unchanged.
• C) Assets will decrease by $125,000.
• D) Assets will increase by $125,000.

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Definitions:

Manufacturer Markup

The difference between the cost of manufacturing a product and its selling price, set by manufacturers to cover expenses and profit.

Diagnostic Software

Computer programs designed to identify and help solve problems within a hardware or software system.

Spare Parts

Components kept on hand for the purpose of repairing or maintaining machines or vehicles.

Third Parties

Entities or individuals that are not directly involved in a transaction or agreement but may be affected by or have an interest in its outcome.