Question

A partner withdraws from a partnership by selling her interest to another person who currently is not associated with the firm. As a results of this transaction, the capital account balance of the other partners in the partnership

a. will remain the same.
b. may increase, decrease, or remain the same.
c. will increase.
d. will decrease

Answer 1

a. will remain the same.

Step-by-step explanation:

A partner withdraws from a partnership by selling her interest to another person who currently is not associated with the firm. As a results of this transaction, the capital account balance of the other partners in the partnership will remain the same.

Answer 2

Answer: Option A

Explanation: The given case relates to the problem of dissolution of partnership and not the dissolution of firm.

In case of dissolution of partnership only the existing agreement among the partners ceases to exist due to leaving or joining of new partners and a new agreement takes place among the existing partners.

In such a case, the account balance of the partner remains same. It changes in case of dissolution of firm.

Hence the correct option is A.