When two single proprietors decide to combine their businesses, generally accepted accounting principles usually require that noncash assets be recorded at their market value as of the date of formation of the partnership.

Question

Quizplus · Accepted Answer

This is true because combining businesses means forming a new entity, hence the assets of both businesses must be recorded at their current market value to accurately reflect the financial worth of the new partnership.

When Two Single Proprietors Decide to Combine Their Businesses, Generally