Answer the following statements true (T) or false (F)
1. In a partnership, a person can become a partner by purchasing an existing partner's interest.
2. The purchase of an existing partner's interest is a transaction between the partnership and the new partner, and not a personal transaction between the two individuals involved.
3. When a new partner enters into a partnership by purchasing an existing partner's interest, the total
assets and equity of the business increase.
4. When a new partner is admitted to a partnership by purchasing an existing partner's interest, the
business's accounting records do not record the transfer of cash from the new partner to the existing
partner.
5. Admission of a new partner to a partnership, by purchasing an existing partner's interest, simply
transfers capital from one partner's account to another.
1. True
2. False
3. False
4. True
5. True
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