Shaun and Rick Are Partners

question 122

Multiple Choice

Shaun and Rick are partners.Shaun has a capital balance of $12,000 and Rick has a capital balance of $10,000.Edwin contributes a building with a current market value of $8000 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 $8000.
• B) Both assets and liabilities will decrease by $8000.
• C) Both assets and equity will decrease by $8000.
• D) Both assets and liabilities will increase by $8000.

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Definitions:

Firewall

A security system for networks that monitors and controls incoming and outgoing network traffic based on predetermined security rules.

Ethernet

A family of computer networking technologies commonly used in local area networks (LAN), for connecting devices.

Protocol

A set of rules and standards that define communication between devices, in computing, enables data exchange over the internet or other networks.

Rootkit

A set of software tools designed to hide the presence of certain processes or programs from regular methods of detection, allowing them to persist undetected on a host.