If a partner is permitted to withdraw more than the book value of his/her interest, the effect of the transaction will increase the capital accounts of the remaining partners.

Question

Quizplus · Accepted Answer

If a partner is permitted to withdraw more than the book value of his/her interest, it means that the partner is taking more than his/her fair share of the assets. This will result in a decrease in the capital accounts of the remaining partners, as they will now have to bear the burden of the partner's excess withdrawal.

If a Partner Is Permitted to Withdraw More Than the Book