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Question
State True or False with reason.
Usually, when a new partner is admitted to the firm there will be an increase in the capital of the firm.
Options
True
False
MCQ
True or False
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Solution
This statement is True
Reason:
When a new partner is admitted to the firm, he brings his share of capital and goodwill, in cash or in-kind, to enjoy the right of sharing the future profit, and hence there will be an increase in the capital of the firm.
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Chapter 3: Reconstitution of Partnership (Admission of Partner) - Exercise 3.1 (Objective Type Questions) [Page 160]
