15.3 Changes in partnership structure

Cards (75)

When a new partner joins a partnership, the total number of partners increases
What do partnership structure changes refer to?
Changes in partners' roles
A partner retiring or leaving a partnership decreases the total number of partners. 
True
What happens to profit/loss sharing ratios when a partner retires?
They are redistributed
When a new partner joins, the total capital of the partnership increases
When a partner retires, the total capital of the partnership decreases.
True
When a new partner joins, the profit/loss sharing ratios are altered
What is modified during a change in capital/profit shares?
Capital contributions and profit/loss shares
A partner retiring or leaving a partnership decreases the total number of partners. 
True
When a new partner joins, the profit/loss sharing ratios are altered
What is modified during a change in capital/profit shares?
Capital contributions and profit/loss shares
When a partner retires, the total capital of the partnership decreases. 
True
How does a new partner joining a partnership affect the partnership's capital accounts?
Increases total capital
What is modified when there is a change in capital or profit shares?
Individual partner's shares
A new partner joining a partnership occurs when a new partner is admitted
When a partner retires, the profit/loss sharing ratios must be updated. 
True
What type of partnership structure change involves adjusting capital contributions or profit/loss sharing ratios?
Change in capital/profit shares
When a partner retires, the total capital of the partnership increases.
False
When a new partner joins, the total number of partners increases
What happens to profit/loss sharing ratios when a partner retires?
They are redistributed
When a partner retires, the total capital of the partnership increases.
False
What is the impact of a new partner joining a partnership on profit/loss sharing ratios?
Ratios are altered
A change in capital/profit shares modifies individual partners' capital contributions and profit/loss shares
When a partner retires, their capital account is debited. 
True
What account is credited when a new partner joins a partnership?
New Partner’s Capital
When capital or profit shares change, capital accounts are adjusted based on new contributions
When a partner leaves a partnership, the remaining partners' profit/loss shares are redistributed. 
True
What is the impact of a new partner joining a partnership on profit/loss sharing ratios?
Ratios are altered
A change in capital/profit shares adjusts capital contributions and profit distribution
When a new partner joins, the total capital of the partnership increases
Match the type of change with its impact:
New Partner Joining ↔️ Increases total capital, alters ratios
Partner Retiring/Leaving ↔️ Decreases total capital, alters ratios
Change in Capital/Profit Shares ↔️ Modifies contributions and profit distribution
When a new partner joins, the profit-sharing ratios of the partnership must be changed
What happens to the partnership's total capital when a partner retires?
It decreases
Changes in capital or profit shares modify both contributions and profit distribution. 
True
Match the type of change with its impact on capital accounts:
New Partner Joining ↔️ Increases capital
Partner Retiring/Leaving ↔️ Decreases capital
Capital/Profit Share Changes ↔️ Adjustments as per agreement
When a partner leaves, their capital account is debited, and cash or assets are credited. 
True
When a new partner joins, the profit-loss sharing ratios are altered
What adjustments are made to capital accounts when profit shares change?
Adjustments as per new agreement
When a partner retires or leaves the partnership, the total capital of the partnership decreases
What happens to the partnership's total capital when a new partner joins?
Increases