When an Additional Partner Is Admitted to a Partnership by Contribution

question 89

Multiple Choice

When an additional partner is admitted to a partnership by contribution of assets to the partnership,

• A) the total assets of the partnership do not change
• B) no liabilities can be contributed at the same time
• C) the amount of the cash contribution is the same as the amount of the debit to the new partner's capital account
• D) the total of the owners' equity accounts increases

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Definitions:

Deed

A legal document representing the ownership and boundaries of property, often used to transfer real estate between parties.

Implied Trusts

An imposed legal arrangement created by a court with the notion that parties acted as though a trust existed, despite not formally establishing one.

Courts

Judicial institutions authorized by the government to adjudicate disputes, interpret laws, and administer justice in legal cases.

Totten Trust

A form of revocable trust created by depositing funds in a bank account in the depositor's name as trustee for another, transferring the funds to the beneficiary upon the depositor's death.