Shaun and Rick Are Partners

question 87

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 invests a building with a current market value of $8,000 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 $8,000.
• B)Both assets and liabilities will decrease by $8,000.
• C)Both assets and equity will decrease by $8,000.
• D)Both assets and liabilities will increase by $8,000.

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Definitions:

Liaison

A person or role that acts as a link to assist in communication or cooperation between groups or individuals.

Ethics Mindfulness

An enriched awareness that causes one to consistently behave with ethical consciousness.

Ethical Consciousness

An individual’s or organization’s awareness and sensitivity to ethical issues and the ethical implications of their decisions and actions.

Emotional Intelligence

The ability to recognize, understand, and manage one's own emotions and the emotions of others.