Chapter 12, Problem 8DQ

(a)

To determine

Partnership

It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

To explain: The difference between the admission of a new partner to a partnership by purchase of an interest from another partner.

(b)

To determine

To explain: The difference between the admission of a new partner to a partnership by contribution of assets to the partnership