Choose TRUE if the statement is correct, and FALSE if it is wrong. 1. There is no impact on the statement of comprehensive income of a partnership when a partner withdraws from the business.
Choose TRUE if the statement is correct, and FALSE if it is wrong. 1. There is no impact on the statement of comprehensive income of a partnership when a partner withdraws from the business.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Choose TRUE if the statement is correct, and FALSE if it is wrong.
1. There is no impact on the statement of comprehensive income of a partnership when a partner withdraws from the business.
2. The admission of a partner does not change the composition of the partners’ equity if the new partner purchases the old partner’s interest by paying the old partner directly.
3. A new partner cannot be admitted into a partnership without the consent of all the partners.
4. The dissolution of the partnership discharges the existing liability of any partner.
5. When a newly admitted partner pays a bonus to the existing partners, the new partner’s capital account is debited to record bonus to old partners.
6. Partnership dissolution is synonymous with partnership liqidation.
7. The assets invested into the partnership and not given to the individual partner increase the total assets of the partnership.
8. When a new partner invests more than the proportionate share he receives in the partnership, a bonus is recorded to his account.
9. Total contributed capital is the sum of the capital balances of the old partners and the actual investment of the new partner. It should always equal the new partnership capital.
10. Partner Lagrimas has a P15,000 credit balance in her capital account int he firm of Lagrimas and Villon. If Ballado purchased Lagrima’s equity interest in the firm for P20,000, the entry on the partnership books to record the transfer would credit Ballado’s capital account for P20,000.
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