When a Partner Is Added to a Partnership

question 53

Multiple Choice

When a partner is added to a partnership:

• A) The previous partnership ends.
• B) The underlying business operations end.
• C) The underlying business operations must close and then re-open.
• D) The partnership must continue.
• E) The partnership equity always increases.

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Definitions:

Forward Contracts

Financial agreements to buy or sell an asset at a predetermined future date and price, used primarily to hedge against price movements.

Exchange Rate

The worth of a currency when converting it into another currency.

Future

The time or period that comes after the present, often considered in terms of expectations, plans, or predictions.

Renminbi

The official currency of the People's Republic of China, also known as the yuan in its unit designation.