When a new partner is admitted to a partnership by purchasing an existing partner's interests,the business's accounting records do not record the transfer of cash from the new partner to the existing partner.

Question

Quizplus · Accepted Answer

When a new partner is admitted to a partnership by purchasing an existing partner's interests, the transfer of cash occurs between the new partner and the business, not between the new partner and the existing partner. Therefore, the accounting records would not reflect a transfer of cash between the existing partner and the new partner.

When a New Partner Is Admitted to a Partnership by Purchasing