Julie contributes, as part of her initial investment, accounts receivable with an allowance for doubtfu accounts. Which of the following reflects a proper treatment? O The accounts receivable and allowance should not be recorded on the books of the partnership because a partner must invest cash in the business. O The balance of the accounts receivable account should be recorded on the books of the partnership at its net realizable value. O The allowance account may be set up on the books of the partnership because it relates to the existing accounts that are being contributed. O The allowance account should not be recorded in the books of the partnership.

Julie contributes, as part of her initial investment, accounts receivable with an allowance for doubtfu accounts. Which of the following reflects a proper treatment? O The accounts receivable and allowance should not be recorded on the books of the partnership because a partner must invest cash in the business. O The balance of the accounts receivable account should be recorded on the books of the partnership at its net realizable value. O The allowance account may be set up on the books of the partnership because it relates to the existing accounts that are being contributed. O The allowance account should not be recorded in the books of the partnership.

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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Question

Julie contributes, as part of her initial investment, accounts receivable with an allowance for doubtful
accounts. Which of the following reflects a proper treatment?
O The accounts receivable and allowance should not be recorded on the books of the
partnership because a partner must invest cash in the business.
O The balance of the accounts receivable account should be recorded on the books of the
partnership at its net realizable value.
O The allowance account may be set up on the books of the partnership because it relates to
the existing accounts that are being contributed.
O The allowance account should not be recorded in the books of the partnership.

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