DISSOLUTION Flashcards
If the agreed capital of the new partner is less than his capital contribution with no adjustment in asset values, there exists
Bonus to Old Partner
In the new admission of a new partner by purchase, the new partner may pay more than, less than or equal to the book value of the interest sold by any or all of the old partners.
TRUE
The partners’ equity or capital in the partnership is referred to as
Capital Credit
The accounting treatment for the sale of the interest of the retiring partner to an outsider or remaining partners is the same as in
Admission by Purchase
Asset revaluation and bonus are one and the same thing
FALSE
If the agreed capital is equal to the total contributed capital with the capital credit and contribution of the old partner and new partners being the same, there exists
No Asset Revaluation and No Bonus
Admission of a new partner by investment will change total assets and total capital
TRUE
A partner who withdraws his interest at book value receives assets
equal to his capital interest
It can be determined by dividing the new partner’s contribution by his fraction of interest
Agreed Capital
If the capital credit of the new partner is less than his contribution with no adjustment in asset values, then the admission resulted in a
Bonus to Old Partners
A partnership dissolution will always lead to a partnership liquidation
FALSE
A type of admission where assets are contributed to the partnership
Admission by Investment
The basis for the computation of the total partnership capital when the amount of a new partner’s contribution has to be determined
Old Partner’s Capital
The difference between the consideration made and the interest transferred in an admission by purchase
Personal Gain or Loss
In the admission of a new partner by investment, agreed capital must always equal contributed capital
FALSE
