When a New Person Is Admitted into a Partnership by Investing

question 18

Multiple Choice

When a new person is admitted into a partnership by investing assets in the partnership at book value,the new person:

• A)pays cash directly to existing partners based on the market value of the partnership's assets.
• B)transfers assets to the partnership which are equal in value to the existing partners' capital balances (no bonus).
• C)pays cash directly to the existing partners in amounts equal to their respective capital balances.
• D)transfers assets to the partnership which are equal in value to the market value of the partnership's assets.

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Definitions:

Characteristics

Features or qualities that serve to identify, describe, or distinguish individuals, groups, or things.

Collectivist Culture

A societal approach that emphasizes the needs, goals, and views of the group over those of the individual.

Larger Community

A broad social unit or group that encompasses individuals beyond immediate familiar or local interactions, typically sharing a common location, interests, or goals.

Self-fulfilling Prophecy

A prediction that causes itself to become true due to the belief and behavior of the person holding it.