GWC Higher Accounting Partnerships 2

Which of the following is NOT an advantage of admitting a new partner?

• More finance available for expansion

• Reduction in share of profits provided no increase in profit for the year earned

• Can bring more skills into the business

Which of the following is an advantage of admitting a new partner?

• Reduction in share of profits

• more disputes can make decision slower

• more finance available for expansion

When a new partner is admitted...

• the old partnership continues

• the old partnership ceases to exisit

• the old partnership is unaffected

Goodwill is defined as...

• a payment over and above the value of the assets for a business

• a payment for the assets minus the liabilities of a business

• a payment for being allowed to buy into a business

Goodwill may arise because of...

• seasonal factors

• a lack of competition

• none of the above

When a new partner is admitted...

• goodwill is values and shared among all partners including the new partner

• goodwill is written off immediately

• goodwill is valued and shared amongst existing partners

When there is a loss on revaluation it will be...

• debited to the equity accounts of the existing partners

• debited to the equity accounts of all partners including the new partner

• credited to the equity accounts of the existing partners

When there is a profit on revaluation it will be...

• debited to the equity accounts of the existing partners

• Debited to the equity accounts of all partners including the new one

• Credited to the equity accounts of the existing partners

When a new partner pays a PREMIUM for goodwill it will be...

• debited to the equity accounts of the existing partners

• debited to the equity accounts of all partners including the new aprtner

• credited to the equity accounts of the existing partners

Goodwill written off will be...

• debited to the equity accounts of the existing partners

• debited to the equity accounts of all partners including the new partner

• credited to the equity accounts of the existing partners