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nus is given to the old partners-

nus is given to the old partners-

FINANCIAL ACCOUNTING
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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Multiple Choice Instruction: Encircle the letter of the corresponding correct answer. 1. When a new partner is admitted in an existing partnership either by purchase of interest or by investment, which of the following statement is true? a. the partnership book is required to be changed with a new one b. bonus should be recorded c. the partnership's non-cash assets should be adjusted to conform with their fair market values d. both requires to undergo the liquidation process 2. When bonus is given to the old partners- a. old partners' capital accounts are credited b. the bonus is divided based on P/L Ratio new partners' capital account is debited d. all of the above C.
Transcribed Image Text:Multiple Choice Instruction: Encircle the letter of the corresponding correct answer. 1. When a new partner is admitted in an existing partnership either by purchase of interest or by investment, which of the following statement is true? a. the partnership book is required to be changed with a new one b. bonus should be recorded c. the partnership's non-cash assets should be adjusted to conform with their fair market values d. both requires to undergo the liquidation process 2. When bonus is given to the old partners- a. old partners' capital accounts are credited b. the bonus is divided based on P/L Ratio new partners' capital account is debited d. all of the above C.
3. When the bonus formula indicates that there is bonus to be given to old partners- a. the new partner's capital account will be credited b. the new partner's capital account will be debited C. the old partners' capital account will be credited d. the old partners' capital account witl be debited
Transcribed Image Text:3. When the bonus formula indicates that there is bonus to be given to old partners- a. the new partner's capital account will be credited b. the new partner's capital account will be debited C. the old partners' capital account will be credited d. the old partners' capital account witl be debited
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