True or FalseInstruction: Write "T" if the statement is correct and "F" if incorrect.1. When a new partner is admitted in an existing partnership, automaticallythe previous partnership contract that has been executed by the existingpartners is "dissolved". Partnership Dissolution2. Admission by purchase of interest is a personal transaction between theselling partner and buying partner.3.In an admission by "purchase of interest" the only concern of thepartnership is the transfer of interest from the selling partner to thebuying partner only.4. One of the characteristics of admission by investment is that both assetsand capitalization of the partnership will increase.Bonus has the effect of decreasing the capital balance of the partnergiving the bonus and increasing the capital balance of the partnerreceiving the bonus.5.6. Total agreed capital refers to the amount of new capital set by thepartners.7. Total contributed capital refers to the combined capital of both new andold partners.8. Under bonus method, the capital of the new partner is computed bymultiplying the contributed capital of both new and old partners by theinterest acquired by the new partner.9. If the capital credit of the new partner is equal to his contribution, nobonus will be given to both the new and old partners.

1) True, when a new partner is admitted then the old partnership deed is automatically and a new…

Instruction: Write "T" if the statement is correct and "F" if incorrect. 1. When a new partner is admitted in an existing partnership, automatically the previous partnership contract that has been executed by the existing partners is "dissolved".

Instruction: Write "T" if the statement is correct and "F" if incorrect. 1. When a new partner is admitted in an existing partnership, automatically the previous partnership contract that has been executed by the existing partners is "dissolved".

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Direction: Write TRUE if the statement is true and FALSE if the statement is false. _1. A written partnership contract is required to be prepared whenever a partnership is formed. _2. All partnerships are subject to income tax. 3. A partner's contribution in the form of industry or service is recorded by debiting the account "Industry". _4. In the partnership books, there are as many capital and drawing accounts as there are partners. _5.A partners contribution in the form of noncash assets should be recorded at its fair market value in the absence of an agreed value. _6.A partnership is much easier and less expensive to organize than corporation. 7. A newly organized partnership should always open a new set of books . _8. All partnerships have at least one general partner. 9. Each partner generally has the authority to enter into contracts which are binding upon the partnership 10. The property invested in a partnership by a partner becomes the property of the partnership.…
S1: All assets invested in the partnership become the property of the partners and not the partnership because in partnership, there is co-ownership.S2: Each partner has a proprietary interest in the partnership both statements are true both are false only S1 is true only S2 is true.
A partnership liquidation occurs when O a. the assets are sold, liabilities paid, and business operations terminated O b. the ownership interest of one partner is sold to a new partner O c. a new partner is admitted O d. a partner dies
A Moving to another question will save this response. Question 1 When a new partner is added to an existing partnership, the underlying business operations must close and reopen. O True False A Moving to another question will save this response.
No need to explain. The following events dissolve a partnership except: a. admission of a partner b. change of the partnership name c. conversion of a partnership to a corporation d. impairment of partnership assets Before dissolution takes effect, liabilities should be restated at their a. fair market values b. present values c. liquidating values d. historical values
Generally, the dissolution spares the partners from previous obligations entered into by the partnership, unless these previous obligations are essential for the winding up of the partnership affairs.
According to this Chapter on Partnerships, are the following statements True or False: Question 1: A partnership allows owners to pool their talents and resources. A. True B. False Question 2: In a partnership, the income is taxed at the partnership level as well as at the personal level of the owners. A. True B. False Question 3: Mutual agency means that any partner can legally bind the other partners and the partnership to business contracts within the scope of the business's regular operations. A. True B. False
True or False: A contributing partner's holding period for an interest in a partnership begins on the date the partnership interest is acquired.
QUESTION 1 Which one of the following alternatives is correct? A. The retirement of a partner from a partnership does not require the calculation of a new profit-sharing ratio but a simple reallocation of a retired partner's share. B. From the legal perspective, the activities of a dissolved and a subsequent new partnership are not separately accounted for and reported on. C. Since partnerships are not governed by a law requiring that IFRS be applied, it is not possible to introduce a standardised accounting procedure according to which changes in the ownership structure of partnerships ought to be recorded. D. Since a partnership is a legal entity, the ownership of a partnership is vested in the partners, and not in the partnership. E. When a change in the ownership structure of a partnership occurs, a new partnership agreement is entered into by the new partners which causes the existing partnership to continue with its business operations without any interruptions.
According to the RUPA, a new partner is admitted to a partnership if a majority of the partners consent. TRUE OR FALSE Which of the following refers to the sale of the partnership’s assets during the winding up process? Multiple Choice Destruction. Termination. Dissociation. Elimination. Liquidation.
M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: