A New Partner Contributes Accounts Receivable to a Partnership Which

question 19

True/False

A new partner contributes accounts receivable to a partnership which appear in the ledger of his sole proprietorship at $20,500 and there was an allowance for doubtful accounts of $750. If $600 of the accounts receivables are completely worthless, the partnership accounts receivable should be debited for $19,900.

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Definitions:

Accounting Profit

The difference between accounting revenues earned and accounting expenses incurred.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life.

Long Service Leave

An employee benefit that provides paid leave for long-term service, specific to certain countries like Australia.

Income Tax Expense

The total amount of income tax a company is obligated to pay, determined by applying the applicable tax rate to the taxable income for a period.