7. The total assets of the partnership will increase upon admission of a new partner by purchase of interest. 8. The admission of a new partner in an existing partnership dissolves the old partnership. 9. Admission of a new partner by purchase of interest is a personal transaction between the selling partner and the buying partner. Hence, any indicated gain in the transaction is not recognized in the partnership books. 10. The percentage interest in a partnership is always the same as the profit-sharing ratio. 11. If the partnership agreement specifies a method for sharing profits, but not losses, the losses are shared equally. 12. Using bonus method, total contributed capital is always equal to total agreed capital. 13. Dissolution immediately causes the termination of a firm. 14. It is easier to change ownership in a corporation than in a partnership. 15. Accounting for the withdrawal of a partner when one of the remaining partners buys the retiring partner's interest is not the same as when an outside person buys a retiring partner's interest.
7. The total assets of the partnership will increase upon admission of a new partner by purchase of interest. 8. The admission of a new partner in an existing partnership dissolves the old partnership. 9. Admission of a new partner by purchase of interest is a personal transaction between the selling partner and the buying partner. Hence, any indicated gain in the transaction is not recognized in the partnership books. 10. The percentage interest in a partnership is always the same as the profit-sharing ratio. 11. If the partnership agreement specifies a method for sharing profits, but not losses, the losses are shared equally. 12. Using bonus method, total contributed capital is always equal to total agreed capital. 13. Dissolution immediately causes the termination of a firm. 14. It is easier to change ownership in a corporation than in a partnership. 15. Accounting for the withdrawal of a partner when one of the remaining partners buys the retiring partner's interest is not the same as when an outside person buys a retiring partner's interest.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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TRUE or FALSE Choose Which answer is correct
Transcribed Image Text:7. The total assets of the partnership will increase upon admission of a new partner by purchase of
interest.
8. The admission of a new partner in an existing partnership dissolves the old partnership.
9. Admission of a new partner by purchase of interest is a personal transaction between the selling
partner and the buying partner. Hence, any indicated gain in the transaction is not recognized in
the partnership books.
10. The percentage interest in a partnership is always the same as the profit-sharing ratio.
11. If the partnership agreement specifies a method for sharing profits, but not losses, the losses are
shared equally.
12. Using bonus method, total contributed capital is always equal to total agreed capital.
13. Dissolution immediately causes the termination of a firm.
14. It is easier to change ownership in a corporation than in a partnership.
15. Accounting for the withdrawal of a partner when one of the remaining partners buys the retiring
partner's interest is not the same as when an outside person buys a retiring partner's interest.
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