Which one of the following alternatives is correct? A. The retirement of a partner from a partnership
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Question:
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. 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.
- D. 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.
E. Since a partnership is a legal entity, the ownership of a partnership is vested in the partners, and not in the partnership.
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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