A new partner was admitted but the assets weren't revalued.A revaluation would have decreased the equity of the partner and partnership.This error would cause:
A)future periods' net income to be understated.
B)future periods' net income to be overstated.
C)this period's end assets to be understated.
D)new partner's capital to be overstated.

Question

Quizplus · Accepted Answer

The new partner's capital would be overstated because they are entering the partnership based on the current book value of assets, which are not revalued to reflect their true lower value.

A New Partner Was Admitted but the Assets Weren't Revalued