If two or more sole proprietors combine their businesses to form a partnership, the basis for the opening entries for the investments of such partners is based upon their respective

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When two or more sole proprietors combine their businesses to form a partnership, the basis for the opening entries for the investments of such partners is based upon their respective balance sheets. This helps to determine the initial contribution of each partner to the partnership, which will affect the future distribution of profits and losses amongst the partners. The income statement, statement of owner's equity, and cash flow statement are not used to determine the initial investment of partners in a partnership.

If Two or More Sole Proprietors Combine Their Businesses to Form