When a withdrawing partner withdraws assets less than his or her capital balance,the excess is treated as a bonus to the remaining partners.

Question

Quizplus · Accepted Answer

This is the correct treatment for a withdrawing partner who takes out less than his or her capital balance. The remaining partners are entitled to a bonus equal to the difference between the withdrawing partner's capital balance and the amount of assets they actually took out.

When a Withdrawing Partner Withdraws Assets Less Than His or Her