Which one of the following alternatives is incorrect? O a. The selling price of the partnership business is determined by the value of its assets. b. When recording the valuation adjustments, if the value a a liability is decreased, the valuation account credited with the amount of a decrease. O c. An existing goodwill account balance is transferred to the partners' capital accounts on admission of a new partner. O d. The change in the ownership structure of the partnership is effectively the same as the dissolution. e. To ensure that compliance is followed, the financial statements of partnerships must be prepared according to IFRS.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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