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) the future periods' net income to be understated.
B) the future periods' net income to be overstated.
C) this period's end assets to be understated.
D) the new partner's capital to be overstated.

Question

Quizplus · Accepted Answer

The new partner's capital would be overstated because the assets were not revalued to reflect their true lower value, leading to an inflated capital account for the new partner.

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