Exercise $4-2.$ Alternate Response: Write TRUE, if the statement is correct and FALSE, if the statement is Incorrect.

Liquidation takes place when there is an admission of a new partner.

When a new partner is admitted in a partnership by purchase of interest, the price paid is relevant to the partnership accounting records.

Dissolution takes place when a partner withdraws from the partnership.

When a new partnership is admitted in the partnership by purchase, the price paid is recorded in the partnership books.

When the fair Market value of the assets contributed by an incoming partner exceeds the amount to be credited to his capital account, the difference is bonus to the new partner.

Upon the admission of a new partner, profit and loss sharing and other consideration should be drawn because dissolution of the original partnership cancels the old agreement.

Retirement of a partner causes dissolution of partnership.

Dissolution dissolves the old partnership but the business continues under new partnership agreement.

$?.$ Dissolution may be affected through purchase of interest of the exiting partner by existing partner$/$s or another incoming partner.

During partnership dissolution, the partnership operation continues.