Which of the following statements is correct?

Question

Quizplus · Accepted Answer

The partnership agreement should include steps to follow if a partner withdraws from the partnership. This is important for the management of the partnership in the event of a partner leaving, and may include details on the distribution of assets, settlement of liabilities, and adjustment of capital accounts.

Option A is incorrect because the old partners' capital accounts may not necessarily increase when a new partner invests cash and receives a bonus. Option B is incorrect because the new partner's capital account should generally be credited for the amount of cash invested. Option D is incorrect because the new partner's capital accounts may also include other items such as their share of profits and losses.

Which of the Following Statements Is Correct