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

question 3

Multiple Choice

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


Definitions:

Proglottid

One of the segments that make up the body of a tapeworm, each capable of producing eggs and developing into a new organism.

Flame Cells

Specialized excretory cells found in some flatworms, functioning in the removal of waste products from the body.

Flatworms

A group of invertebrates within the phylum Platyhelminthes, known for their flat bodies, and include species such as tapeworms and liver flukes.

Excretion

Elimination of metabolic wastes by an organism at exchange boundaries such as the plasma membrane of unicellular organisms and excretory tubules of multicellular animals.

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