When the owner of a sole proprietorship accepts a partner, the assets of the proprietorship
A)must be transferred to the partnership at the values reflected in the financial records of the proprietorship.
B)must be converted to cash and used to pay any debts of the proprietorship, with excess cash available for investment in the new partnership.
C)may be adjusted to reflect current values before being transferred to the partnership.
D)cannot be invested in the new partnership.

Question

Quizplus · Accepted Answer

When a sole proprietorship transitions into a partnership, the assets can be re-evaluated to reflect their current market values before being transferred to the new partnership. This allows for a more accurate representation of the assets' worth at the time of the partnership's formation.

When the Owner of a Sole Proprietorship Accepts a Partner